Accounting Manual PDF

WATER AND POWER DEVELOPMENT
AUTHORITY
ACCOUNTING AND FINANCIAL REPORTING MANUAL

Version 6
M. YOUSUF ADIL SALEEM & CO.

Chartered Accountants
Member of Deloitte Touche Tohmatsu
Limited
66-E-FCC, Syed Maratab Ali Road,
Gulberg IV, Lahore Pakistan
Tel: +92 (0) 42 35757188
Fax: +92 (0) 42 35763091
WATER AND POWER DEVELOPMENT AUTHORITY
TABLE OF CONTENTS
1 INTRODUCTION .................................................................................................... 1
1.1 GENERAL INFORMATION .................................................................................... 1
1.2 VISION STATEMENT AND VALUES ......................................................................... 1
1.3 OBJECTIVES................................................................................................... 1
1.4 SCOPE .......................................................................................................... 2
1.5 TERMS USED IN THE MANUAL .............................................................................. 2
2 CUSTODY AND REVISION ........................................................................................ 10
2.1 CUSTODY AND CONTROL .................................................................................. 10
2.2 REVIEW PROCESS ........................................................................................... 10
3 ROLES & RESPONSIBILITIES..................................................................................... 11
3.1 FISCAL ROLES................................................................................................ 11
3.2 FISCAL RESPONSIBILITIES ................................................................................. 11
4 ACCOUNTING STANDARDS AND SIGNIFICANT ACCOUNTING POLICIES & PRINCIPLES................ 13
4.1 INTERNATIONAL ACCOUNTING STANDARDS ........................................................... 13
4.2 ACCOUNTING POLICIES .................................................................................... 14
4.2.1 Reserve for Development Works .................................................................... 14
4.2.2 Ijarah .................................................................................................... 15
4.2.3 Grants ................................................................................................... 15
4.2.4 Property, Plant and Equipment...................................................................... 15
4.2.5 Capital Work in Progress.............................................................................. 16
4.2.6 Investment in Associated Undertakings ............................................................ 16
4.2.7 Investment in Subsidiary.............................................................................. 16
4.2.8 Stores, Spare Parts and Loose Tools ................................................................ 16
4.2.9 Trade Debts ............................................................................................. 17
4.2.10 Cash and Cash Equivalents ........................................................................... 17
4.2.11 Revenue Recognition .................................................................................. 17
4.2.12 Hydel Levies ............................................................................................ 17
4.2.13 Taxation ................................................................................................. 17
4.2.14 Staff Retirement Benefits ............................................................................ 17
4.2.15 General Provident Fund and WAPDA Welfare Fund. ............................................. 17
4.2.16 Foreign Currencies..................................................................................... 18
4.2.17 Financial Assets ........................................................................................ 18
4.2.17.1 Initial Recognition ........................................................................................... 18
4.2.17.2 Subsequent Measurement .................................................................................. 18
4.2.17.3 Financial Assets at Fair Value Through Profit or Loss .................................................. 18
4.2.17.4 Loans and Receivables ...................................................................................... 18
4.2.17.5 Held-to-Maturity Investments .............................................................................. 18
4.2.17.6 Available-for-Sale Financial Assets........................................................................ 19
4.2.18 Financial Liabilities .................................................................................... 19
4.2.18.1 Initial Recognition and Measurement ..................................................................... 19
4.2.18.2 Subsequent Measurement .................................................................................. 19
4.2.18.3 Financial Liabilities at Fair Value Through Profit or Loss.............................................. 19
4.2.18.4 Financial Liabilities at Amortised Cost ................................................................... 20
4.2.18.5 Derecognition ................................................................................................ 20
4.2.18.6 Offsetting of Financial Assets and Financial Liabilities ................................................ 20
4.3 ACCOUNTING PRINCIPLES ................................................................................. 20
4.3.1 Historical Cost Principle .............................................................................. 20
4.3.2 Matching Principle ..................................................................................... 20
4.3.3 Full Disclosure Principle .............................................................................. 20
4.3.4 Accrual Basis............................................................................................ 20
M. Yousuf Adil Saleem & Co., Chartered Accountants Page 1

Member of Deloitte Touche Tohmatsu Limited V6
4.3.5 Going Concern .......................................................................................... 21

4.4 QUALITATIVE CHARACTERISTICS OF FINANCIAL STATEMENTS OF WAPDA ....................... 21
4.4.1 Understandability ...................................................................................... 21
4.4.2 Relevance ............................................................................................... 21
4.4.3 Materiality .............................................................................................. 21
4.4.4 Reliability ............................................................................................... 21
4.4.5 Faithful Representation............................................................................... 21
4.4.6 Substance Over Form.................................................................................. 21
4.4.7 Neutrality ............................................................................................... 22
4.4.8 Prudence ................................................................................................ 22
4.4.9 Completeness .......................................................................................... 22
4.4.10 Comparability .......................................................................................... 22
4.4.11 Timeliness............................................................................................... 22
5 CHART OF ACCOUNTS ........................................................................................... 23
5.1 GENERAL ..................................................................................................... 23
5.2 RESPONSIBILITY ............................................................................................. 23
5.3 ELEMENTS OF CHART OF ACCOUNTS .................................................................... 24
5.3.1 Group Level ............................................................................................. 24
5.3.2 Control Level ........................................................................................... 25
5.3.3 Sub Control Level Code ............................................................................... 25
5.3.4 Subsidiary-Account Code ............................................................................. 25
5.4 DISTRIBUTION OF CHART OF ACCOUNTS ............................................................... 26
5.5 DETAILED SUBSIDIARY GL ACCOUNT .................................................................... 26
6 ACCOUNTING RECORDS ......................................................................................... 27
6.1 INTRODUCTION .............................................................................................. 27
6.2 RESPONSIBILITY ............................................................................................. 27
6.3 PROCEDURE .................................................................................................. 27
6.3.1 Proper Book Keeping .................................................................................. 27
6.3.2 Double-Entry Book Keeping .......................................................................... 27
6.3.3 Prevention of Unauthorized Access ................................................................. 28
6.3.4 Disaster Recovery and Planning ..................................................................... 28
6.3.5 Retention Period ....................................................................................... 28
6.3.6 Disposition .............................................................................................. 30
7 ACCOUNTING FOR FIXED ASSETS.............................................................................. 31
7.1 TANGIBLE AND INTANGIBLE ASSETS ..................................................................... 31
7.1.1 Responsibility........................................................................................... 31
7.1.2 Procedures .............................................................................................. 32
7.1.3 Fixed Assets Acquisition and Capitalization ....................................................... 33
7.1.4 Recording of Fixed Assets on Acquisition .......................................................... 33
7.1.5 Trade in of Fixed Assets .............................................................................. 34
7.1.6 Measuring the Fixed Asset After Acquisition ...................................................... 34
7.1.7 Capitalization of Expenditure........................................................................ 34
7.1.7.1 Land ............................................................................................................... 35
7.1.7.2 Buildings and Civil Works ...................................................................................... 36
7.1.7.3 Machinery/ Equipment ......................................................................................... 36
7.1.7.4 Computers ....................................................................................................... 37
7.1.7.5 Furniture and Fixtures ......................................................................................... 38
7.1.7.6 Vehicles .......................................................................................................... 38
7.1.7.7 Office & Electric Equipment .................................................................................. 39
7.1.8 Accounting of T&P ..................................................................................... 39
7.1.9 Donated Assets ......................................................................................... 41
7.1.10 Repairs and Improvements ........................................................................... 41
7.1.11 Fixed Assets Register .................................................................................. 41
7.1.11.1 Contents of Fixed Assets Register ......................................................................... 42

7.1.11.2 Recording of Fixed Assets in Register .................................................................... 43

7.1.11.3 Updating the Fixed Asset Register ........................................................................ 43
7.1.11.4 Safe keeping of Assets ...................................................................................... 44
7.1.11.5 Identification of Fixed Assets .............................................................................. 44
7.1.11.6 Effect of Errors or Inaccurate Changes in Register ..................................................... 44
7.1.12 Leased Assets ........................................................................................... 45
7.1.12.1 Approval of Lease ............................................................................................ 45
7.1.12.2 Initial Recognition of Finance Leases ..................................................................... 46
7.1.12.3 Subsequent Measurement of Finance Leases ............................................................ 46
7.1.12.4 Operating Leases............................................................................................. 47
7.1.12.5 Ijarah Rentals ................................................................................................ 47
7.1.12.6 Lease Amendment Procedure .............................................................................. 48
7.1.13 Depreciation of Fixed Assets ......................................................................... 48
7.1.13.1 Depreciation Amount and Depreciation Method ........................................................ 48
7.1.13.2 Factors to be Considered in Determining Useful Life of an Asset .................................... 49
7.1.13.3 Depreciation Rates .......................................................................................... 49
7.1.13.4 Depreciation Entries......................................................................................... 50
7.1.14 Impairment of Assets .................................................................................. 50
7.1.14.1 Impairment Indicators ...................................................................................... 51
7.1.14.2 Assessment of Impairment ................................................................................. 51
7.1.14.3 Measuring Recoverable Amount ........................................................................... 51
7.1.14.4 Recognizing and Measuring Impairment Losses ......................................................... 52
7.1.14.5 Accounting Treatment of an Impairment Loss .......................................................... 52
7.1.14.6 Reversing an Impairment Loss ............................................................................. 52
7.1.14.7 Accounting Treatment of a Reversal of Impairment Loss ............................................. 53
7.1.14.8 Verification of Assets Criteria ............................................................................. 53
7.1.14.9 Controls ....................................................................................................... 53
7.1.14.10 Reconciliation ................................................................................................ 54
7.1.14.11 Lost or Stolen Property ..................................................................................... 54
7.1.14.12 Retaining the Physical Verification Record .............................................................. 55
7.1.15 Insurance of Fixed Assets ............................................................................. 55
7.1.15.1 Insurance of Other Assets .................................................................................. 56
7.1.15.2 Reporting of Property Related Losses .................................................................... 56
7.1.15.3 Record Keeping .............................................................................................. 56
7.1.15.4 Procedure for Reporting Damage or Loss ................................................................ 57
7.1.15.5 Movement of WAPDA Equipment from one Location to Another Location .......................... 58
7.1.15.6 Compensation for Loss by Theft of WAPDA Owned Moveable Assets ................................ 58
7.1.15.7 Physical Verification ........................................................................................ 58
8 CAPITAL WORK IN PROGRESS .................................................................................. 60
8.1 GENERAL ..................................................................................................... 60
8.2 CAPITAL WORKS IN PROGRESS- FEASIBILITY STUDY PHASE ......................................... 61
8.2.1 Pre-Feasibility Stage .................................................................................. 61
8.2.2 Feasibility Stage ....................................................................................... 61
8.3 CAPITAL WORKS IN PROGRESS- NEW PROJECTS ...................................................... 61
8.3.1 Capital Works In Progress- New Hydel Power Projects .......................................... 61
8.3.2 Capital Works In Progress- New Water Projects .................................................. 62
8.4 PRELIMINARY CIVIL WORKS ............................................................................... 63
8.5 CAPITALISATION ON COMPLETION ....................................................................... 63
8.6 APPORTIONMENT OF COMMON COSTS .................................................................. 64
8.7 COMPLETION OF PROJECT ................................................................................ 64
8.7.1 Final Bills from Contractor ........................................................................... 64
8.7.2 Final Certificate by PD ................................................................................ 64
8.8 CAPITAL WORK IN PROGRESS-ADDITIONAL CIVIL WORKS ON EXISTING HYDEL POWER
PROJECTS ............................................................................................................ 65
8.9 DEPOSIT WORKS IN PROGRESS FOR WAPDA FORMATIONS ........................................... 66
9 RECEIVEABLE, ADVANCES & DEPOSITS ....................................................................... 67
9.1 RECEIVABLE MANAGEMENT ............................................................................... 67

9.1.1 Responsibility........................................................................................... 67
9.1.2 General Instructions ................................................................................... 67
9.1.3 Internal Control ........................................................................................ 67
9.1.4 Accounting for Receivables Written Off............................................................ 68
9.1.5 Aging of Accounts Receivable ........................................................................ 68
9.1.6 Reconciliation and Review ........................................................................... 68
9.1.7 Division of Responsibility ............................................................................. 69
9.1.8 Minimum Prescribed Information.................................................................... 69
9.2 ADVANCES.................................................................................................... 70
9.2.1 Scope .................................................................................................... 70
9.2.2 Responsibility........................................................................................... 70
9.2.3 Basic Procedure and Guidelines ..................................................................... 70
9.2.4 Travel Advances........................................................................................ 71
9.2.5 Monitoring Advances .................................................................................. 71
9.2.6 Miscellaneous Advances............................................................................... 71
9.2.7 Review ................................................................................................... 72
9.3 DEPOSITS ..................................................................................................... 72
10 TRADE DEBTORS ............................................................................................... 74
10.1 GENERAL................................................................................................... 74
10.2 PROVISION FOR DOUBTFUL DEBTS .................................................................... 74
10.3 WRITE OFF OF UNCOLLECTIBLE ACCOUNTS ........................................................ 74
10.4 CORRECTION OF ERRORS ............................................................................... 74
10.5 AGING OF TRADE DEBTORS ............................................................................. 74
11 STORES & STOCKS INVETORY ............................................................................... 76
11.1 STORES INVENTORIES ................................................................................... 76
11.2 STOCK CODING ........................................................................................... 76
11.3 STOCK CODES ............................................................................................. 77
11.3.1 Group Level ............................................................................................. 77
11.3.2 Control Level ........................................................................................... 77
11.3.3 Sub Control Level ...................................................................................... 78
11.3.4 Subsidiary Account Level ............................................................................. 78
11.3.5 Responsibility........................................................................................... 78
11.4 STORE PROCUREMENT .................................................................................. 78
11.5 STORE KEEPING .......................................................................................... 79
11.6 STORE ACCOUNTING..................................................................................... 79
11.7 ACCOUNTING/PRICING OF MATERIAL PURCHASED/ACQUIRED ................................... 79
11.7.1 Local Purchases Through Tender / Quotation. .................................................... 79
11.7.2 Purchase Through Purchase Committee or Petty Advances ..................................... 80
11.7.3 Material Indented from other WAPDA Formations ................................................ 80
11.7.4 Foreign Material Purchase ............................................................................ 80
11.8 PRICING OF STORE RETURNED BY MAINTENANCE SECTIONS. .................................... 80
11.8.1 Un-Used Material ...................................................................................... 81
11.8.2 Defective/ Damaged Material ....................................................................... 81
11.8.3 Scrap for Disposal. ..................................................................................... 81
11.9 RECORDING OF INVENTORY ............................................................................ 82
11.10 ISSUE OF MATERIAL FROM STORE. .................................................................... 82
11.10.1 Issue of Consumable Material ..................................................................... 82
11.10.2 Issue of Spare Parts ................................................................................. 83
11.10.3 Issue of T&P.......................................................................................... 83
11.10.4 Issue of Store to other WAPDA Formations. .................................................... 83
11.10.5 Issue of Scrap for Disposal. ........................................................................ 83
11.10.6 Issued Material Account ............................................................................ 84
11.11 PHYSICAL VERIFICATION OF STORE INVENTORY ................................................... 84
11.12 FUNDING, PRICING AND ACCOUNTING OF FOREIGN PURCHASED MATERIAL................... 84

12 TREASURY MANAGEMENT .................................................................................... 87

12.1 CASH COLLECTION, DEPOSIT AND RECONCILIATION ............................................... 87
12.2 SCOPE ...................................................................................................... 87
12.3 RESPONSIBILITY .......................................................................................... 87
12.4 COLLECTION .............................................................................................. 87
12.5 DEPARTMENTS AUTHORIZED TO COLLECT MONEY ................................................. 88
12.6 MAINTAINING CASH COLLECTION RECORDS ........................................................ 88
12.7 TRAINING AND ASSISTANCE FOR DEPARTMENTS ................................................... 89
12.8 SAFEKEEPING OF CASH .................................................................................. 89
12.9 SEGREGATION OF DUTIES ............................................................................... 89
12.10 RECONCILIATION AND REVIEW ......................................................................... 90
12.11 CASH BOOK ................................................................................................ 90
12.12 CASH DISBURSEMENT .................................................................................... 92
12.12.1 Authorization and Processing of Disbursement ................................................. 92
12.12.2 Demand for Funds ................................................................................... 92
12.12.3 Accounting Entries to be Passed .................................................................. 93
12.12.4 Payment to Employees ............................................................................. 94
12.12.5 Payment to Other Parties .......................................................................... 94
12.12.6 Payees Acknowledgement ........................................................................ 95
12.12.7 Travel Reimbursement ............................................................................. 95
12.12.8 Cash Disbursements Internal Control ............................................................ 95
12.12.9 Review ................................................................................................ 95
12.13 PETTY CASH MANAGEMENT ............................................................................ 96
12.13.1 Responsibility ........................................................................................ 96
12.13.2 Appointment of Petty Cash Custodian ........................................................... 96
12.13.3 Responsibilities ...................................................................................... 96
12.13.4 Safekeeping .......................................................................................... 97
12.13.5 Documentation ...................................................................................... 97
12.13.6 Reconciliation ....................................................................................... 97
12.13.7 Reimbursement Petty Cash Fund ................................................................. 97
12.13.8 Cash Disbursements From Petty Cash ............................................................ 98
12.13.9 Reporting Stolen or Lost Petty Cash ............................................................. 98
12.13.10 Closing a Petty Cash Account ..................................................................... 98
12.14 BANK ACCOUNT OPENING, MAINTENANCE AND CLOSING ......................................... 99
12.14.1 Responsibility ........................................................................................ 99
12.14.2 Bank accounts for Federal/ Provincial Water/Power Projects .............................. 99
12.14.3 Bank accounts for Common Services and Authority Secretariat ............................ 100
12.14.4 Bank accounts for Revenue and Projects....................................................... 100
12.14.5 Recording Bank Accounts and Related Activity in the General Ledger .................... 101
12.14.6 Administration and Oversight of WAPDA Bank Accounts ..................................... 101
12.14.7 Cheque Books ....................................................................................... 102
12.14.8 Cheque Books Custody ............................................................................ 102
12.14.9 Cheques Writing Procedure ...................................................................... 102
12.14.10 Expired Cheque Cancellation Procedure ....................................................... 103
12.15 CHEQUES RECEIVED BY WAPDA ....................................................................... 103
12.15.1 Foreign Cheques.................................................................................... 105
12.15.2 Cheque Encashment ............................................................................... 105
12.15.3 Security .............................................................................................. 106
12.16 BANK RECONCILIATION STATEMENT ................................................................. 106
12.16.1 Responsibility ....................................................................................... 106
12.16.2 Guidelines for Bank Reconciliations............................................................. 106
12.16.3 Report Preparation ................................................................................ 107
12.16.4 Bank Reconciliation Record ...................................................................... 108
13 PAYABLES, ACCRUALS AND DEPOSITS ................................................................... 109

13.1 ACCOUNTS PAYABLES .................................................................................. 109

13.2 RESPONSIBILITY ......................................................................................... 109
13.3 RECORDING OF ACCOUNTS PAYABLE ................................................................ 109
13.4 AUTHORIZATION ........................................................................................ 110
13.5 ACCOUNTING FOR SUPPLIER BILLS................................................................... 110
13.6 ESTABLISHMENT OF CONTROL DEVICES............................................................. 110
13.7 PAYMENTS UNDER THE CONTRACTS FOR CIVIL WORKS .......................................... 111
13.7.1 Advance Payments .................................................................................... 111
13.7.2 Progress Payments .................................................................................... 111
13.7.3 Retention Moneys ..................................................................................... 111
13.7.4 Currency of Payment ................................................................................. 111
13.7.5 Payments ............................................................................................... 111
13.8 CONTRACTORS LEDGER FOR WORKS ............................................................... 112
13.9 ACCOUNTING FOR PAYROLL EXPENSES ............................................................. 114
13.9.1 Responsibility.......................................................................................... 114
13.9.2 Payroll Preparation ................................................................................... 114
13.9.3 Payroll Administration ............................................................................... 115
13.9.4 Changes in Payroll Data .............................................................................. 115
13.9.5 Payroll Deductions and Reductions ................................................................ 116
13.9.6 Payroll Taxes .......................................................................................... 116
13.9.7 Review of Payroll ..................................................................................... 116
13.9.8 Special Payments To Employees.................................................................... 116
13.9.9 Payment Through Bank .............................................................................. 116
13.9.10 Filing of Tax Returns .............................................................................. 117
13.10 RECONCILIATIONS....................................................................................... 117
13.11 ESTABLISHMENT RETURN .............................................................................. 118
13.12 ACCRUAL OF OTHER EXPENSES ....................................................................... 119
13.12.1 Responsibility ....................................................................................... 119
13.12.2 Methods for Determining Amounts .............................................................. 119
13.12.3 Reimbursement..................................................................................... 119
14 PRE AUDIT .................................................................................................. 121
14.1 GENERAL.................................................................................................. 121
14.2 RESPONSIBILITY ......................................................................................... 121
14.3 PROCEDURE FOR PRE-AUDIT .......................................................................... 121
14.4 PRE-AUDIT OF WORKS BILLS .......................................................................... 122
14.4.1 Contractors Bills for Works ......................................................................... 122
14.4.2 Suppliers Bill........................................................................................... 124
14.4.3 Bills for Refund of Security Deposit of Contractors for Works: ................................ 124
14.5 CONSULTANTS EXPENDITURE ........................................................................ 125
14.6 MAIN CONTRACTORS EXPENDITURE ................................................................ 125
14.7 RE- IMBURSEMENT APPLICATIONS ................................................................... 126
14.8 RECOUPMENT OF IMPREST ACCOUNT ............................................................... 126
14.9 PRE- AUDIT OF ESTABLISHMENT BILLS .............................................................. 127
14.9.1 Pay and Allowances of Regular Establishment ................................................... 127
14.9.2 Audit of Pay Bills of Officers and Regular Establishment ....................................... 128
14.10 WORK CHARGED ESTABLISHMENT ................................................................... 132
14.10.1 General .............................................................................................. 132
14.10.2 Audit of Pay Bills of Work-Charged Establishment ............................................ 133
14.11 CONTINGENT EXPENDITURE........................................................................... 134
14.11.1 General .............................................................................................. 134
14.11.2 Contingent Establishment ........................................................................ 134
14.11.3 Audit of Pay Bill of Contingent Establishment................................................. 134
14.12 TRAVELLING ALLOWANCE BILLS. .................................................................... 135
14.12.1 General .............................................................................................. 135
14.12.2 Audit of T.A Claims ................................................................................ 135

14.13 MAINTENANCE OF AUDIT REGISTER .................................................................. 136

15 FOREIGN LOANS, GRANTS AND AIDS ..................................................................... 137
15.1 INTRODUCTION .......................................................................................... 137
15.2 PROCEDURE FOR AWARDING AND UTILIZATION ................................................... 137
15.3 FOREIGN LOANS/AIDS DISBURSMENT ................................................................ 137
15.3.1 Accounting of Loan Disbursement and Loan Liability ........................................... 138
15.4 FOREIGN LOANS REPAYMENTS ........................................................................ 138
16 FOREIGN EXCHANGE PAYMENTS FROM SELF SOURCE ................................................ 140
16.1 ACCOUNTING OF FOREIGN PAYMENTS FROM SELF SOURCE ..................................... 140
16.2 FOREIGN EXCHANGE PAYMENTS FOR OPERATIONS AND MAINTENANCE...................... 140
16.3 OPENING OF LETTERS OF CREDITS ................................................................... 140
16.4 PROCEDURE FOR OPENING OF LETTERS OF CREDITS ............................................. 141
16.5 PAYMENT OF INVOICES OF EXPATRIATES FOR SERVICES ......................................... 142
16.6 DOWN PAYMENTS ....................................................................................... 143
17 ACCOUNTING FOR REVENUE .............................................................................. 144
17.1 RESPONSIBILITY ......................................................................................... 144
17.2 SALE OF ELECTRICITY .................................................................................. 144
17.3 MISCELLANEOUS INCOME .............................................................................. 145
18 INVESTMENT ACCOUNTING FUNCTION .................................................................. 146
18.1 INVESTMENT OF SURPLUS FUNDS .................................................................... 146
18.2 INVESTMENT COMMITTEE .............................................................................. 146
18.3 WORKING BALANCES ................................................................................... 146
18.4 SURPLUS FUNDS ......................................................................................... 147
18.5 OTHER INVESTMENTS BY WAPDA ..................................................................... 147
18.6 CLASSIFICATION OF INVESTMENTS................................................................... 148
18.6.1 Held to Maturity Securities .......................................................................... 148
18.6.2 Available for Sale Securities ........................................................................ 148
18.6.3 Held for Trading Securities .......................................................................... 148
18.7 VALUATION OF INVESTMENT .......................................................................... 148
18.8 REVALUATION SURPLUS/DEFICIT .................................................................... 148
19 INTERWING/INTEROFFICE TRANSACTIONS .............................................................. 150
19.1 INTRODUCTION .......................................................................................... 150
19.2 SERVICES WHERE DEBIT/CREDIT ADVICES ARE RAISED ........................................... 150
19.3 PREPARATION AND DISTRIBUTION OF DEBIT ADVICES ............................................ 151
19.3.1 Head Office Debit Advices........................................................................... 151
19.3.2 Field Office Debit Advices ........................................................................... 151
19.3.3 Supporting Documents of Debit/Credit Advices ................................................. 152
19.3.4 Numbering of Debit Advices......................................................................... 152
19.3.5 Cancellation or Modification of Debit Advices ................................................... 152
19.4 PREPARATION AND DISTRIBUTION OF CREDIT ADVICES .......................................... 152
19.4.1 Head Office Credit Advices ......................................................................... 152
19.4.2 Field Office Credit Advices .......................................................................... 152
19.4.3 Supporting Documents of Credit Advices ......................................................... 152
19.4.4 Numbering of Credit Advices........................................................................ 153
19.4.5 Cancellation or Modification of Credit Advices .................................................. 153
19.4.6 Change of Serial Numbers ........................................................................... 153
19.4.7 Field Office Debit Advice Register ................................................................. 153
19.5 ACCOUNTING OF DEBIT/CREDIT ADVICES ........................................................... 154
19.6 CURRENT ACCOUNT WITH HEAD OFFICE............................................................ 154
19.7 FIELD OFFICE/PROJECT CURRENT ACCOUNTS IN HEAD OFFICE ................................ 155
19.8 MONTHLY STATEMENT OF CURRENT ACCOUNT ................................................... 155

19.9 ANNUAL CLOSING ....................................................................................... 155

20 TRANSACTIONS THROUGH SUPERSCRIBED CHEQUES ................................................. 157
21 RAISING FUNDS THROUGH BONDS/SUKUK/TFC ETC .................................................. 160
22 ACCOUNTING OF SELF FINANCING UNITS/WAPDA FUNDS ........................................... 162
22.1 ACCOUNTING OF SELF FINANCING UNIT ............................................................ 162
22.2 SELF-FINANCING UNITS OF POWER WING ........................................................... 162
22.3 SELF-FINANCING UNITS WATER WING ............................................................... 162
22.4 PROCEDURE FOR SETTING SERVICE RATES ......................................................... 163
22.5 FINANCIAL REPORTING ................................................................................. 163
22.6 ACCOUNTING OF FUNDS ............................................................................... 164
22.7 ACCOUNTING OF SPECIAL PURPOSE VEHICLE COMPANIES ....................................... 164
23 TAX RETURNS ................................................................................................ 165
23.1 WITH-HOLDING INCOME TAX RETURNS.............................................................. 165
23.2 GENERAL SALES TAX RETURNS ....................................................................... 165
23.3 PROVINCIAL SALES TAX RETURNS .................................................................... 165
24 REPORTING ................................................................................................... 166
24.1 CONTROL OVER EXPENDITURE THROUGH BUDGET CONTROL REGISTER...................... 166
24.2 ANNUAL REPORT OF WAPDA .......................................................................... 170
24.3 DONOR SPECIFIC REPORTS ............................................................................ 170
24.4 RESPONSIBILITY ......................................................................................... 170
24.5 WAPDA HYDROELECTRIC REGULATED BUSINESS .................................................. 171
24.6 GENERAL GUIDELINES .................................................................................. 171
APPENDICES .......................................................................................................... 173
ANNEXURE - 1 - ABBREVIATIONS ................................................................................. 174
ANNEXURE 2 - CHART OF ACCOUNTS .......................................................................... 176
ANNEXURE 3 SUBSIDIARY GENERAL LEDGER ACCOUNT .................................................. 178
ANNEXURE 4 - FIXED ASSETS REGISTER ....................................................................... 179
ANNEXURE 5 - CONTRACTOR LEDGER ......................................................................... 180
ANNEXURE 6 - GOODS RECEIVED NOTE ........................................................................ 181
ANNEXURE 7 - GOODS RECEIVED NOTE REGISTER ........................................................... 182
ANNEXURE 8 - SMB REGISTER ................................................................................... 183
ANNEXURE 9 - MRS REGISTER ................................................................................... 184
ANNEXURE - 10 - STOCK REGISTER .............................................................................. 185
ANNEXURE 11 - BIN CARD ........................................................................................ 186
ANNEXURE 12 - STORE VALUE LEDGER ........................................................................ 187
ANNEXURE 13 - MATERIAL REQUISITION SLIP (MRS) ........................................................ 188
ANNEXURE 14 - STOCK MEASUREMENT BOOK (LOCAL PURCHASE)/ VALUATION SHEET ............. 189
ANNEXURE 15 - MATERIAL INDENT FOR OTHER FORMATION STORE .................................... 190
ANNEXURE - 16 STOCK MEASUREMENT BOOK (FOREIGN PURCHASES) / VALUATION SHEET ........ 191
ANNEXURE 17 - STORE RETURN WARRANT ................................................................... 192
ANNEXURE 18 - STORE RETURN WARRANT REGISTER ...................................................... 193

ANNEXURE 19 - SURVEY REPORT OF STORE.................................................................. 194

ANNEXURE 20 STOCK VERIFICATION ......................................................................... 195
ANNEXURE 21 - CASH BOOK ..................................................................................... 196
ANNEXURE 22 - IMPREST CASH BOOK.......................................................................... 197
ANNEXURE 23 - CHEST INCOMING/OUTGOING REGISTER .................................................. 198
ANNEXURE 24 - FUNDS DEMAND FORMAT HYDEL POWER DEV PART-I .................................. 199
ANNEXURE 25 - FUNDS DEMAND FORMAT HYDEL POWER DEV PART-II ................................. 200
ANNEXURE 26 - FUNDS DEMAND FORMAT WATER DEV PART-I ........................................... 201
ANNEXURE 27 - FUNDS DEMAND FORMAT WATER DEV PART-II ........................................... 202
ANNEXURE 28 - FUNDS DEMAND FORMAT WATER DEV PART-III .......................................... 203
ANNEXURE - 29 FUNDS DEMAND FORMAT HYDEL OPERATIONS .......................................... 204
ANNEXURE 30 - BANK CHEQUE BOOK REGISTER ............................................................. 205
ANNEXURE 31 - BANK RECONCILIATION STATEMENT ....................................................... 206
ANNEXURE 32 - RETIREMENT OF CONSIGNMENT ............................................................ 207
ANNEXURE 33 - L.C UTILIZATION REGISTER .................................................................. 208
ANNEXURE 34 - DEBIT ADVICE REGISTER ..................................................................... 209
ANNEXURE 35 - CREDIT ADVICE REGISTER .................................................................... 210
ANNEXURE - 36 - S.S CHEQUE BOOK REGISTER ................................................................ 211
ANNEXURE 37 - S.S CHEQUES ISSUED/RECEIPT REGISTER ................................................. 212
ANNEXURE 38 - GST RETURNS FORMAT ....................................................................... 213
ANNEXURE 39 - BUDGET CONTROL REPORT ................................................................. 214


1 INTRODUCTION
1.1 GENERAL INFORMATION
Pakistan Water and Power Development Authority (WAPDA) is an autonomous

Federal institution governed by the Provisions of WAPDA Act 1958. WAPDA
Authority comprises of Chairman and Members Water, Power and Finance. Its
statutory mandate is development and utilization of the water and power resources
of the country on a unified and multi-purpose basis. WAPDA is empowered through
the Act to frame program for the generation of Hydel and Thermal Power,
Transmission and distribution lines and Grids etc. The Power Wing of the Authority
has been restructured whereby the thermal power generation, power distribution
and power transmission has been transferred to independent generation
companies, distribution companies and a transmission and dispatch company. The
Power Wing of WAPDA now only undertakes generation and sale of electricity from
Hydel Power Generation. The registered office of the Authority is situated at
WAPDA House, Shahrah-e-Quaid-e- Azam, Lahore, PAKISTAN.
This Accounting and Financial Reporting Manual has been compiled to provide
guidance to the employees of the Water and Power Development Authority
(WAPDA) on all major areas of the accounting and financial reporting process. This
manual lays down comprehensive policies and procedures to be followed by the
Finance and Accounts WAPDA and the Accounting Units within the formations. It
includes the relevant portions/recitals from the existing Accounting Manual being
used by the Authority, as well as, some new chapters to bring it in-line with latest
best practices. The policies stated herein are minimum requirements under normal
conditions and are intended to assist the accounting personnel in the preparation
of accurate and reliable financial information and its reporting to the management.
1.2 VISION STATEMENT AND VALUES
The Accounts and Finance function within WAPDA is characterized by:

i. Providing centralized services of accounting and fund management to
WAPDA.
ii. Providing valued service and response to WAPDAs financial needs.
iii. Remaining updated with finance and accounting rules and regulations and
interpreting them for the benefit of all users of accounting services.
iv. Using latest technologies in the implementation of best accounting and fund
management practices.
v. Recognizing change as an essential process critical to the financial
development of WAPDA, and facilitating financial change for the effective
utilization of resources in the accomplishment of WAPDA mission and vision.
1.3 OBJECTIVES
The purpose of this manual is to establish self-acting standards, providing a clear

understanding of responsibilities of staff in the Finance and Accounts Department
of WAPDA and of the Accounting Units at the projects who are entrusted with the
book-keeping duties. The policies and procedures stated in this manual will ensure

better understanding amongst the staff members with regard to the performance
of their duties.
The main objective of this manual is to provide the Budget and Accounts staff with
a ready reference guide that helps the users of this manual with understanding
standard policies and procedures for efficient and effective performance of their
accounting and finance duties.
After the implementation of this manual, the Budget and Accounts staff shall
become fully conversant with all aspects of the accounting and financial reporting
function of WAPDA.
1.4 SCOPE
This manual shall be reviewed and approved by WAPDA Authority from time to time
or as and when need arises.
The policies and procedures prescribed in this manual shall apply to all accounting
and finance related matters of WAPDA.
1.5 TERMS USED IN THE MANUAL
Terms Description
Accounting records The manual and computerized records of

assets and liabilities, monetary transactions;
various journals, ledgers, and supporting
documents (such as agreements, cheques,
invoices, vouchers) and books of accounts,
which WAPDA is required to keep in
pursuance of legal obligations and in the
transactions of business.
Accounting Unit A primary unit of the Authority (Office,

Project, Division) which is headed by a
Drawing and Disbursing Officer designated as
such by the Authority.
Each accounting unit is allocated a separate
location/numeric code for identification and
reporting to the Head Office.
Each accounting unit shall prepare its
monthly accounts, store accounts, Assets
register and other related records for
reporting to Head Office
Accounts payables The obligation to pay off a short term debt

obligations arising from the ongoing
operations including the acquisition of
supplies and services.
Accounts receivable The money owed to WAPDA as a result of

Terms Description
various types of financial transactions,
including, but not limited to Sale of power,
deposit works, and services rendered.
Accounts Written Off Accounts receivables which in the opinion of

the DDO/relevant authority have no chance
of recovery and are considered as
uncollectible.
Acquisition Cost The invoice price of fixed assets including

the cost of modifications, attachments,
accessories, or auxiliary apparatus necessary
to bring the asset in usable condition. Other
charges such as the cost of installation,
transportation, taxes, duty or protective in-
transit insurance, shall be included in the
acquisition cost.
Allowance for Doubtful Debts The estimate of the portion of gross

receivables which shall be or seem to be
uncollectible.
Asset Something valuable that an entity owns,

benefits from, or has right to use of, in
generating income. It is a resource:
i. Controlled by WAPDA as a result of
past events; and
ii. From which future economic benefits
are expected to flow to WAPDA.
Authority WAPDA Authority comprising of a Chairman,

Members Water, Power and Finance.
Bank Reconciliation Process of matching and comparing figures

from accounting records against those
presented on a bank statement. After
adjusting any item which has no relation to
the bank statement, the balance of the
accounting ledger shall reconcile to the
balance of the bank statement.
Bank Reconciliation Statement Statement showing the comparison of cash

book balance with the bank statement
balance.
Bank Statement A copy issued by a bank to a customer

showing the customer's account maintained

Terms Description
at the bank.
Budget A plan of financial operation embodying an

estimate of proposed expenditures for a
given period and the proposed means of
financing them.
Capitalized Fixed Assets Capitalized fixed assets are those which

have a useful life of more than one year and
have to be capitalized as per policy of
WAPDA.
Cash Refers to money in the physical form of

currency, such as bank notes and coins.
Cash Advance Request Form A form specifically designed for acquiring

cash advances along with an
estimate/details of expenses.
Cash Book-Imprest A book used in accounting units to record

details of cash (or through cheque) for
making payments of the formations out of
funds provided by the GM Finance.
Chart of Accounts It is a framework for the general ledger

system and basis for accounting. The chart
of accounts consists of account titles and
account codes assigned against each
description.
Custodian of Cash An individual responsible for safeguarding

cash.
Demand Draft Demand draft (also called DD) is a written

bank document for making payments outside
the city limits. The person making payments
is called drawee and the recipient is called
payee. The bank providing the service is
called drawer.
Deposit (Paid) The sum that WAPDA shall pay in advance as

per the terms of the contract/agreement as
a security and shall be refundable at the
completion of the contract/ agreement.
Deposit Slip A form specifically designed for the

depositing the cash and cheques in bank
accounts.
Disbursement Request Form A form specifically designed for the

Terms Description
cash/cheque disbursement purpose.
Disbursement Vouchers The vouchers used to request payments for

any goods, services, or other miscellaneous
payments that are not covered by a
purchase order.
Dishonored Cheque A cheque which is returned unpaid by the

bank on which it is drawn alongwith the
reason of such non-payment.
Drawing & Disbursing The person incharge of an office, project,

Officer(DDO) unit or other formation, designated by the
Authority who is responsible for the
accounting unit under his jurisdiction, and is
entrusted with the drawing and
disbursement of funds, and is responsible for
the maintenance of records and reporting to
supervising office.
Expense Expense which is general in nature including

WAPDA supplies, office repair, vehicle
running and maintenance, postage, utilities,
reimbursement of travel, salaries and wages
of staff, and other operational expenses
related to the operations of WAPDA.
Fair Value The amount for which an asset could be

exchanged and a liability be settled between
knowledgeable, willing parties in an arms
length transaction.
Finance Lease A lease that transfers substantially all the

risks and rewards incidental to ownership of
an asset to the lessee. The title of the asset
is eventually transferred to the lessee on
completion of the lease.
Financial Statements Comprising of trial balance, profit and loss

account, balance sheet, cash flow and other
statements which are derived from the
accounting records of WAPDA.
Fiscal Year A twelve months period over which the

Authority budgets its spending. Fiscal year of
WAPDA is established for the period ending
on 30th June of each calendar year.

Terms Description
Fittings The fitting are additions etc., which are

attached or installed in a building and can
be removed and re-installed without costly
or extensive alterations to the area in which
it is affixed
Fixed Asset Fixed Asset (also known as a non-current

asset) may be land, land improvement,
building, infrastructure, equipment,
furniture & fixtures, vehicles and computers
which has a life expectancy (i.e. usage
period) of more than one year. Items with a
life expectancy of one year or less are
considered to be consumable items.
Fixed Assets Register A register maintained by all accounting units

which contains complete record of tangible
fixed assets relating to and in custody of the
formation. The information contained in
fixed assets register includes description of
the asset, assets location, cost,
depreciation charged and other particulars
relating to a fixed asset.
Fixture The equipment that is attached or

permanently fastened to a building and
cannot be removed without costly or
extensive alterations to the building or area
in which it is affixed.
Forgery The crime of falsely or fraudulently making

or altering a document.
Fraud The intentional deception or

misrepresentation in order to obtain
something of value.
Fund Management Management of cash flow and security of

all cash collected and disbursed.
General Ledger A group of accounts that supports the

information shown in the financial
statements. The general ledger is used to
accumulate all financial transactions of
WAPDA, and is supported by subsidiary
ledgers that provide details for certain
accounts in the general ledger. The general
ledger is the foundation for the
accumulation of data and reports.

Terms Description
Imprest Fixed sum of money advanced / provided to

a person/office for a particular purpose
which is recouped on submission of
periodical expense statements.
Initial Cost The assets purchase price plus any costs
directly attributable to bringing the asset to
the location and condition necessary for it to
be capable of use in the manner intended.
Directly attributable costs could include, but
are not limited to, site preparation costs,
initial delivery and handling costs,
installation and assembly costs, asset testing
costs, and professional fees. Initial cost does
not include costs of advertising, conducting
business and administration (e.g. staff
training), other general overheads, or cost
of relocating or reorganizing.
Intangible Asset An identifiable non-monetary asset without

physical substance.
Inventories Inventories in the context of WAPDA supplies

and stores means:
Consumables used in laboratories.
Consumables used in workshops.
Computer supplies.
Materials or supplies of general use to be
consumed in WAPDA and its departments
(e.g. Stationeries).
Consumables for repair and maintenance
of plant and machinery
Miscellaneous Collections- Cash A book used to record details of

book miscellaneous receipts / income of a
formation
Online Transfer A method of immediate/instant transferring

of money between bank accounts.
Operating Lease A lease contract which allows the use of an

asset over an agreed period of time but does
not convey the rights of ownership. The
ownership of the asset remains with the
lessor.
Other Liabilities Represents miscellaneous obligations to

outside parties (other than accounts

Terms Description
payable) who have furnished
resources/services to WAPDA.
Pay Order A payment instrument which is used to

settle payment obligations. This instrument
is guaranteed by the bank for its full value
(similar to a demand draft). In practice,
these instruments are payable at the branch
of issue and are used for payment within the
local clearing jurisdiction.
Payroll and Benefits Include items such as:

Pay and Allowance
Wages of Construction Labour
Daily Wages Labour
Employee Benefits
Employers Share in Fund
Contributions
Petty Cash A small amount of funds in the form of cash

used for petty expenditures where it is not
practical to make the disbursement by
cheque.
Pre-Audit Pre-Audit is a process of internal control by

which all payments processed by the Budget
and Accounts Office are counter checked by
the senior person for accuracy, authority
and other approvals etc., before the cheque
is finally signed by the concerned officers.
Project Director A person incharge of a formation/project

designated as such by the Authority to
perform the function of DDO.
Standing Order An order by the customers to their banker to

pay a specified amount usually on or around
a particular day of the month regularly to
another bank account.
Tag A distinct control number of all assets

/equipment/ property belonging to WAPDA.
Timing Difference A difference that clears over a period of

time.
Un-Presented Cheque A cheque issued which is passing through the

bank clearing system, but has not yet been

Terms Description
presented to the bank where the account is
maintained.
Useful Life The period over which an asset is expected

to be available for use by WAPDA. It is
determined in relation to an entire asset
category, as opposed to an individual asset
and after considering the factors such as
expected usage, physical wear and tear,
technical or commercial obsolescence, legal
or other limits.
Weighted Average An average in which each quantity to be

measured is assigned a weight. These
weightages determine the relative
importance of each quantity on the average.
This average takes into account the
proportional relevance of each component,
rather than treating each component
individually.

2 CUSTODY AND REVISION

2.1 CUSTODY AND CONTROL
This manual contains policy statement of WAPDA. Changes in statutes, WAPDAs

legal form & other conditions and practices may require periodic modifications of
these policies and procedures. The overall responsibility for maintaining and
updating this manual, therefore, rests with the Authority.
On behalf of the Authority the General Manager Finance (Co-ordination) shall be

responsible for its custody and circulation. Copies of this manual may not be
provided to any external party except with the prior approval of concerned general
manager. However, access to this Manual shall not be restricted for such external
parties who are entitled to it in accordance with the provisions of any law for the
time being in force or in accordance with their terms of engagement.
2.2 REVIEW PROCESS
Feedbacks, comments, corrections and improvement suggestions on this policy

manual (including any areas that are not sufficiently or well covered) can be
received at all times from users and others who may be tasked with the review. All
suggestions/recommendations shall be forwarded to the respective General Manager
Finance for consideration. Once these are approved the same shall be forwarded to
the General Manager Finance (coordination) for adoption and circularization as an
amendment
The manual as a whole shall be reviewed after every five years and a fresh edition
shall be issued incorporating all changes and modifications proposed/implemented
since the previous version. The task shall be carried out by review committees at all
levels of formations.

3 ROLES & RESPONSIBILITIES

3.1 FISCAL ROLES
The Authority is the principal administrative body of WAPDA. The Member (Finance)
shall be responsible for compliance of all fiscal matters of WAPDA with applicable
laws, policies and regulations as may be devised by the Authority.
The Member concerned shall be overall responsible for the management of the
respective wing of WAPDA. The role and functions of the Members are as defined in
the WAPDA Act. However, in respect of financial management, the Members may
nominate other officers of the Authority to represent them on various committees
of WAPDA.
The employee of a WAPDA formation shall be responsible for performing fiscal
activities in WAPDA in accordance with their designations, roles and responsibilities
as prescribed in the Book of Financial Powers for WAPDA.
3.2 FISCAL RESPONSIBILITIES
The following fiscal responsibilities are set forth to facilitate financial management
with the recognition that a financial management system is sound in design.
Therefore, it is important to recognize that WAPDA management shall carry out
these financial management responsibilities in order to prevent fiscal misconduct
and other errors, and where prevention is not achieved despite the Employees
reasonable efforts, to provide for timely detection and reporting:
i. WAPDA, through its training unit, shall provide training and development
support to fiscal roles and responsibilities.
ii. All Fiscal Employees are entrusted with the responsibility of preserving
WAPDA resources and using those resources in a prudent manner for their
designated purposes, as provided by policies, laws, regulations, rules,
contracts, grants, and donor agreements wherever applicable.
iii. Fiscal Employees who personally participate in a fiscal transaction have the
following fiscal responsibilities as appropriate to their level of involvement:
a) Personal participation is required by at least two individuals in every
transaction.
b) Personal participation is evidenced and certified on each transaction by
a signature on the fiscal transaction.
c) Ensuring that the fiscal transaction:
1. Has proper authorization, including requisite supervisory checks.
2. Results in no violation of the applicable conflict of interest policy or
law.
3. Has adequate availability of budget allocated or otherwise
available within regularly approved budgets to cover it (specific
to expenditures).
4. Occurs after reasonable consideration of the effect/impact on

WAPDA.
5. Is in accordance with all WAPDA and other applicable policies,
laws, regulations, and rules, and contracts, grants and donor
agreements.
iv. Ensuring that the fiscal transaction is recorded in WAPDAs accounting
system:
a) In a timely manner.
b) In the accounting period to which it relates.
c) Using adequate descriptions of transactions and correct account code.
d) In accordance with all other WAPDA accounting policies.

4 ACCOUNTING STANDARDS AND SIGNIFICANT ACCOUNTING POLICIES

& PRINCIPLES
4.1 INTERNATIONAL ACCOUNTING STANDARDS
1. International Federation of Accountants (IFAC) a global organisation for

accountancy profession formed in 1977 is an apex body which undertakes
standardization of accounting policies for preparation of financial
statements in a manner that these are understandable globally.
2. International Accounting Standards Board (IASB) an independent board

within the IFAC has been tasked with the development and issuance of the
standards known as International Financial Reporting Standards (IFRS)
(previously IAS) for the commercial entities. The purpose of the
standardization is that financial statement of all entities applying these
standards, reflect a true and fair view of the business affairs of the
organization in a manner which is comparable and understandable by
various constituents of the society / regulators.
3. IFAC has also initiated the standardisation of reporting of financial

statements of Government and public sector organisations. International
Public Sector Accounting Standards (IPSAS) are a set of accounting
standards issued by the IPSAS Board, another independent organ of IFAC, for
use by public sector entities around the world in the preparation of
financial statements. These standards are based on International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards
Board (IASB). IPSASB adapts IFRS to a public sector context when
appropriate. In undertaking that process, the IPSASB attempts, wherever
possible, to maintain the accounting treatment and original text of the IFRS
unless there is a significant public sector issue which warrants a departure.
4. The Government of Pakistan is in the process of adopting IPSAS. The Federal

Government, Provincial Governments and District Governments are
presenting their financial statements on Cash Basis IPSAS, as a first step.
This is a transition step where, in the second phase the accrual based IPSAS
will be adopted. IPSAS does not apply to entities which fall under the
Government Business Enterprise (GBE) definition.
5. WAPDA prepares its financial statements on accrual basis. The water and
coordination wings are not engaged in any commercial activity as main line
of business. The power wing (Hydroelectric) is engaged in generation and
sale of electricity from hydel sources on purely commercial basis. WAPDA
Hydroelectric falls under the definition of Government Business Enterprise
(GBE), as defined in IPSAS 1. However whenever Authority decides to
consolidate its financial statements the issue of applications of the IPSAS
will be addressed accordingly.

6. WAPDA Hydroelectric has adopted IFRS for preparation of its financial

statements as it meets all the requirements of the Government Business
Enterprise as defined in IPSAS-1 which are:
a. All Hydel Power Projects are constructed, on Build, Own & Operate
(BOO) basis in the name and title of WAPDA. The projects after
completion are transferred to Power Wing (Hydro Electric) for their
operation and maintenance.
b. According to the clause 8 of the WAPDA Act 1958, it has been
assigned the financial and operational authority to carry out business
of Hydro Power generation. WAPDA for its Hydro Electric Stations
holds Generation License # GL (Hydel) / 05 /2004 issued by NEPRA
under section 30 of NEPRA Act 1997.
c. As per Power Purchase Agreement (PPA) dated 24 January 2011
signed with NTDC, WAPDA Hydroelectric sells electricity produced to
NTDC at the bulk supply Tariff determined by NEPRA under Tariff
Standards and Procedure Rules 1998, which is determined on cost
plus basis to earn return on investments. Therefore WAPDA
(Hydroelectric) sells product in the normal course of its operation.
d. The Tariff of WAPDA Hydroelectric has been determined on the basis
of its annual revenue requirement, similar to the commercial
entities on cost plus margin basis. Power development projects
appear in Annual PSDP budget on notional basis, the funding of
which is met by WAPDA (Hydroelectric) from various sources i.e.
through sale of power as well as local and foreign loans obtained
through various mode of financing. WAPDA (Hydroelectric)
repays/services project loans from the revenues earned through sale
of power.
e. WAPDA Hydroelectric is owned by Government of Pakistan and is
controlled by the WAPDA Authority in accordance with provisions of
the WAPDA Act 1958. Further as per section 26 of NEPRA Act, 1997
WAPDA Hydroelectric is being treated as a company registered under
the Companies Ordinance 1984 and therefore prepares its financial
statements like a corporate business entity and gets the same
audited from a firm of Chartered Accountants.
4.2 ACCOUNTING POLICIES
Accounting policies are the specific principles, basis, conventions, rules and
practices applied by an entity in preparing and presenting its financial statements.
Some of the significant accounting policies which are applied in the preparation
and presentation of financial statements are given hereunder:
4.2.1 Reserve for Development Works
Reserve for development works refers to specific reserves created from retained
earnings by WAPDA. This reserve is used for the construction of new/ongoing hydel
power development projects through Annual Development Plans of the GoP.

4.2.2 Ijarah
The Ijarah refers to an arrangement where payments made on agreed time as rent.
Ijarah payments for Ijarah agreements are recognized as an expense in the income
statement on a straight line basis spread over the term of the Ijarah in line with
the provision of IFAS 2 -Ijarah.
4.2.3 Grants
Grants may be of two types: against specific expenses or for specific assets. When
the grant relates to an expense item, it is recognised as income over the period
necessary to match the costs that it is intended to compensate. Where the grant
relates to an asset, it is recognised as deferred income and charged to income in
equal amounts over the expected useful life of the related asset.
In case of non-monetary grants (grants in kind), the asset and the grant are
recorded at nominal amounts and recorded in the income statement over the
expected useful life of the relevant asset by equal annual installments.
4.2.4 Property, Plant and Equipment
1. Property, plant and equipment except freehold land and certain assets disposed
off and leased back during previous years are stated at cost less accumulated
depreciation and any identified impairment loss. Freehold land is stated at
cost.
2. Subsequent costs are included in the asset's carrying amount or recognized as a

separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Hydroelectric and the cost of
the item can be measured reliably. All other repair and maintenance costs are
charged to profit and loss account during the period in which they are incurred.
3. Depreciation is charged to profit and loss account on straight-line method so as

to write off the cost of property, plant and equipment and other assets over
their estimated remaining useful lives. However, depreciation charged on
assets that directly relates to construction and acquisition of other assets is
included in the cost of such assets. Depreciation on addition to property, plant
and equipment is charged from the month in which the asset is available for use
and continued till the month of disposal.
4. An item of property, plant and equipment is de-recognized upon disposal or

when no future economic benefits are expected from its use or disposal. Any
gain or loss arising on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and carrying amount of the asset) is
included in the profit and loss account in the year the asset is de-recognized.
5. The carrying amounts of the assets are reviewed on regular basis to determine
whether there is any indication of impairment. If such indication exists, the
recoverable amount of such asset is estimated. An impairment loss is
recognized wherever the carrying amount of the asset exceeds its recoverable
amount. Impairment losses are recognized as loss in profit and loss account. A

previously recognised impairment loss is reversed only if there has been a

change in the estimates used to determine the asset's recoverable amount since
the last impairment loss was recognized in which case the carrying amount of
the asset is increased to its assessed recoverable amount. However increased
amount cannot exceed the carrying amount that would have been determined,
net of depreciation, had no impairment loss been recognised for the asset in
prior years. The reversal in the impairment loss is recognised as a profit in
profit and loss account.
6. Depreciation for the year is based on economic useful life of individual assets.
Depreciation at full rate is charged in the month of purchase/completion and
no depreciation is charged in the month of disposal. No depreciation is to be
charged when an asset is fully depreciated.
4.2.5 Capital Work in Progress
Capital work in progress is stated at cost less accumulated impairment losses, if

any. Projects are transferred to operational formations, when 100%
progress/completion is certified by the consultants and verified by the respective
formations own engineers.
4.2.6 Investment in Associated Undertakings
Investments in associated undertakings are initially recognised at cost. At

subsequent reporting dates, the recoverable amounts are estimated to determine
the extent of impairment losses, if any and carrying amounts of investments are
adjusted accordingly. Impairment losses are recognised as an expense. When
impairment losses subsequently reverse, the carrying amounts of the investments
are increased to the revised recoverable amounts but limited to the extent of the
initial cost of investments. A reversal of impairment loss is recognised in the profit
and loss.
4.2.7 Investment in Subsidiary
Investment in subsidiary company is measured initially at cost as per the

requirements of IAS-27 "Consolidated and Separate Financial Statements". At
subsequent reporting dates, the carrying amounts of the investments and its
recoverability are reviewed to determine whether there is an indication that such
investments have suffered an impairment loss. In case of impairment, the carrying
amount of the investment is adjusted to the extent of impairment loss. Impairment
losses are recognized as an expense in the current period.
4.2.8 Stores, Spare Parts and Loose Tools
Stores are valued at moving average cost method, except items in transit which are
stated at cost comprising invoice value plus incidental charges thereon.
Stores in transit are valued at invoice value plus other charges incurred thereon.

4.2.9 Trade Debts
Trade debts and other receivables are carried at original invoice amount less an
estimate for doubtful trade debts and other receivable based on review of
outstanding amounts at the year end. Balances considered bad and irrecoverable
are written off when identified.
4.2.10 Cash and Cash Equivalents
For the purpose of cash flow statement cash and cash equivalents comprise of cash
in hand, cash at bank and short term highly liquid investment, that are readily
convertible to known amount of cash and which are subject to an insignificant risk
of change in value.
4.2.11 Revenue Recognition
Revenue from the sale of electricity is recognized on transmission of electricity to

the National Transmission and Despatch Company Limited.
Profit on bank deposit is recognized using effective interest method.
Dividend on equity investment is recognized when right to receive the dividend is

established.
4.2.12 Hydel Levies
Hydel levies include net hydel profit payable to the provinces as per instructions of
the Federal Government; water charges payable to Governments of Azad Jammu &
Kashmir and Gilgit Baltistan; and IRSA charges, levied by GoP. These levies are
recognized in the profit and loss account as operational expense.
4.2.13 Taxation
Any income of the Pakistan Water & Power Development Authority (WAPDA)
established under the Pakistan Water & Power Development Authority Act 1958 is
exempt from income tax under clause-66(xvi) of the Second Schedule of (Part-I) to
the Income Tax Ordinance 2001.
4.2.14 Staff Retirement Benefits
WAPDA operates its own post retirement, pension, free electricity and medical
benefits scheme for its employees. The liabilities in NEPRA regulated business for
current and retired employees are determined by consulting the actuaries on the
basis of actuarial valuation. Contributions towards these funds are made on the
basis of actuarial valuation and are presently charged to income.
4.2.15 General Provident Fund and WAPDA Welfare Fund.
WAPDA operates self contributed General Provident Fund and WAPDA Welfare Fund
for its employees. Deductions are made from the salaries of the employees and
remitted to the funds.

4.2.16 Foreign Currencies
Foreign currency transactions are recorded using the rate of conversion applicable
on the date of transaction. All monetary assets and liabilities in foreign currencies
are translated at exchange rates prevailing at the balance sheet date except in the
case of foreign currency loans covered by the State Bank of Pakistan's Exchange
Risk Coverage Scheme which are translated at the rates provided under the
scheme, exchange differences for the period up to the date of commissioning of
assets financed out of foreign currency loans are capitalized to the extent they are
eligible for capitalisation. All other exchange differences are charged to income
statement.
4.2.17 Financial Assets
4.2.17.1 Initial Recognition
Financial assets within the scope of IAS 39 are classified as financial assets at fair
value through profit or loss, loans and receivables, held-to-maturity investments,
available-for-sale financial assets, as appropriate.
Financial assets are recognized initially at fair value plus, in the case of
investments not at fair value, through profit or loss, directly attributable
transaction costs.
4.2.17.2 Subsequent Measurement
The subsequent measurement of financial assets depends on their classification as

follows:
4.2.17.3 Financial Assets at Fair Value Through Profit or Loss
Financial assets at fair value through profit or loss include, financial assets held for
trading and financial assets designated upon initial recognition at fair value
through profit or loss. Financial assets are classified as held for trading if they are
acquired for the purpose of selling in the near term. Financial assets at fair value
through profit and loss are carried in the balance sheet at fair value with gains or
losses recognized in the income statement.
4.2.17.4 Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or

determinable payments that are not quoted in an active market. Such financial
assets are carried at amortized cost using the effective interest rate method. Gains
and losses are recognized in the income statement when the loans and receivables
are derecognized or impaired, as well as through the amortization process.
4.2.17.5 Held-to-Maturity Investments
Non-derivative financial assets with fixed or determinable payments and fixed

maturities are classified as held-to- maturity when the Hydroelectric has the
positive intention and ability to hold it to maturity. After initial measurement held-

to-maturity investments are measured at amortized cost using the effective

interest method. This method uses an effective interest rate that exactly discounts
estimated future cash receipts through the expected life of the financial asset to
the net carrying amount of the financial asset. Gains and losses are recognized in
the income statement when the investments are derecognized or impaired, as well
as through the amortization process.
4.2.17.6 Available-for-Sale Financial Assets
Available-for-sale financial assets are non-derivative financial assets that are

designated as available-for-sale or are not classified in any of the three preceding
categories. After initial measurement, available-for-sale financial assets are
measured at fair value except the investment in unquoted equity shares which are
carried at cost with unrealized gains or losses recognized directly in equity until
the investment is derecognized, at which time the cumulative gain or loss recorded
in equity is recognized in the income statement, or determined to be impaired, at
which time the cumulative loss recorded in equity is recognized in the income
statement.
4.2.18 Financial Liabilities
4.2.18.1 Initial Recognition and Measurement
Financial liabilities within the scope of IAS 39 are classified as financial liabilities at
fair value through profit or loss, loans and borrowings, or as derivatives designated
as hedging instruments in an effective hedge, as appropriate. All financial
liabilities are recognised initially at fair value and in the case of loans and
borrowings, plus directly attributable transaction costs.
4.2.18.2 Subsequent Measurement
The measurement of financial liabilities depends on their classification as follows:
4.2.18.3 Financial Liabilities at Fair Value Through Profit or Loss
Financial liabilities at fair value through profit or loss includes financial liabilities
held for trading and financial liabilities designated upon initial recognition as at
fair value through profit or loss.
Financial liabilities are classified as held for trading if they are acquired for the
purpose of selling in the near term. This category includes derivative financial
instruments entered into by WAPDA that are not designated as hedging instruments
in hedge relationships as defined by IAS 39. Separated embedded derivatives are
also classified as held for trading unless they are designated as effective hedging
instruments.
Gains or losses on liabilities held for trading are recognised in the income
statement.

4.2.18.4 Financial Liabilities at Amortised Cost
After initial recognition, interest bearing loans and borrowings are subsequently
measured at amortised cost using the effective interest rate method. Gains and
losses are recognised in the income statement when the liabilities are
derecognised.
4.2.18.5 Derecognition
A financial liability is derecognised when the obligation under the liability is

discharged, cancelled or expires.
4.2.18.6 Offsetting of Financial Assets and Financial Liabilities
A financial asset and a financial liability is offset and the net amount is reported in
the balance sheet if WAPDA has legal enforceable right to set off the recognized
amount and intends either to settle on a net basis or to realize the assets and
settle the liability simultaneously. Corresponding income on assets and charge on
liability are reported at net amount.
4.3 ACCOUNTING PRINCIPLES
Some of the accounting principles that may be applied in the preparation and
presentation of WAPDAs financial statements are depicted in the following
diagram:
4.3.1 Historical Cost Principle
The value of WAPDA assets shall reflect the original cost of those assets under the
historical cost principles, less applicable depreciation or amortization. Historical
cost provides the actual cost of the asset at the time of its acquisition.
4.3.2 Matching Principle
The WAPDA shall recognize the revenue earned and expenditure incurred in the
income and expenditure statement on the basis of a direct association between the
income earned and the costs incurred to earn that income.
4.3.3 Full Disclosure Principle
Any information, whether or not strictly financial, that is relevant to the business
and may have a future impact, must be disclosed.
4.3.4 Accrual Basis
Financial statements of WAPDA are prepared on accrual basis of accounting. Under

this Principle, the effects of transactions and other events are recognized when
they occur (and not as cash or its equivalent are received or paid) and they are
recorded in the accounting records and reported in the financial statements of the
periods to which they relate.

4.3.5 Going Concern
The financial statements are prepared on the assumption that WAPDA is a going
concern and will continue in operation for a foreseeable future.
4.4 QUALITATIVE CHARACTERISTICS OF FINANCIAL STATEMENTS OF WAPDA
The financial statements of WAPDA shall contain the qualitative characteristics

depicted in the chart below to make the financial statements more presentable
and understandable to the users:
4.4.1 Understandability
The information reflected in the financial statements of WAPDA should be easily

understandable by users of those financial statements.
4.4.2 Relevance
The Information presented in the financial statements should be relevant to its

components, be precise, and fulfill the decision-making needs of the users.
Information is relevant when it influences the economic decisions of the users by
helping them evaluate past, present or future events or confirming, or correcting,
their past evaluations.
4.4.3 Materiality
The financial statements should present all information which is material within
the context of the financial information reflected in the financial statements for
the benefit of the users.
Information is material if its omission or misstatement could influence the

economic decisions of users taken on the basis of the financial statements.
4.4.4 Reliability
The financial statements should present the information which is reliable.

Information has the quality of reliability when it is free from material error and
bias, and can be depended upon by the users.
4.4.5 Faithful Representation
The information reflected in the financial statements must represent faithfully the
transactions and other events, it either purports to represent or could reasonably be
expected to represent.
4.4.6 Substance Over Form
The financial statements should faithfully present the transactions and other events
relating to the business activities in accordance with their substance and economic
reality and not merely their legal form.

4.4.7 Neutrality
The information contained in the financial statements must be neutral.
4.4.8 Prudence
Prudence is the inclusion of a degree of caution in the exercise of the judgments

needed in making the estimates required under conditions of uncertainty, such that
assets or income are not overstated and liabilities or expenses are not understated.
Uncertainties such as the collectability of doubtful receivables, are recognized by

the disclosure of their nature and extent and by the exercise of prudence in the
preparation of the financial statements.
4.4.9 Completeness
To be reliable, the information presented in the financial statements must be

complete within the bounds of materiality and cost. An omission can cause
information to be false or misleading and thus unreliable and deficient in terms of
its relevance.
4.4.10 Comparability
The financial statements should be prepared in a manner that the financial results
of one year can be easily compared with the results of the previous years. The
users must be able to compare the financial statements of WAPDA in order to
identify trends in its financial position and performance over a number of years.
4.4.11 Timeliness
The financial statements should be presented to the users in a timely manner to

facilitate the decision making process. In case of WAPDA the timelines defined in
the WAPDA Act have to be followed. If there is undue delay in the reporting of
information it may lose its relevance. The Management may need to balance the
relative merits of timely reporting and the provision of reliable information. To
provide information on a timely basis it may often be necessary to report the
financial information before all aspects of a transaction or other events are known,
thus impairing reliability. Conversely, if reporting is delayed until all aspects are
known, the information may be highly reliable but of little use to the decision
makers who have had to make decisions in the interim. In achieving a balance
between relevance and reliability, the overriding consideration should be how best
to satisfy the economic decision-making needs of the users.

5 CHART OF ACCOUNTS
5.1 GENERAL
The chart of accounts includes account codes for general ledger activity and
account codes for subsidiary ledger entries with a purpose to accumulate all
financial transactions of WAPDA.
The Office of the General Manager (Finance) shall develop and maintain the Chart
of Accounts of the respective wing of WAPDA. Initially chart of accounts are to be
maintained by accounting units at the subsidiary account level which accumulates
them into consolidated chart of accounts which are then eventually sent to
respective GM Finance. The account codes in the chart of account will allow the
respective accounting unit to track the revenues and expenses.
All payments/receipts and journal vouchers, cheque requisitions, inter-formation
transfers, purchase orders, invoices, and other accounting paperwork must be
properly coded with the proper Account code, and Sub-Account code, so that
transactions can be properly tracked and communicated/recorded.
The account coding system:
i. Provides uniformity in the coding of accounts in group level and control level
in all wings of WAPDA.
ii. Provides greater capability for generating financial information for
management reports, cost analysis, etc.
iii. Provides a method to meet the record keeping requirements of the funding &
granting agencies as well as to generate more meaningful information for
improved budget and expenditure reporting.
iv. Creates a sound base for WAPDA accounting systems and the development of an
effective program by utilizing electronic data processing equipment.
The account code shall appear on all financial reports produced by the automated
accounting system of WAPDA and will also be used on personnel and payroll forms,
procurement requests, purchase orders, funds advance, and other documents of a
financial or budgetary nature affecting WAPDAs accounts. The account codes
provide a means of interpreting and classifying data into an abbreviated and
condensed form.
The chart of account is attached as Annexure-2
5.2 RESPONSIBILITY
The General Ledger of each wing of WAPDA is fiscally maintained by respective GM

Finance. The GM Finance (Power, Water & Co-ordination) shall be responsible to
follow up financial concerns relative to accounting unit management in a timely
manner.
All new codes up to sub control level in the chart of account shall be opened only after
the approval of the respective GM Finance and subsidiary account level at accounting
units by their respective account head. All requests for opening of new accounts may
be made in writing, giving the following particulars:

i. Description of transaction
ii. Head of Account
iii. Proposed code
Any change or amendment in accounting codes shall be made only after the
approval of respective GM Finance who ensures that the chart of accounts is
consistent with the coding structure of respective wing of WAPDA.
All opening of new codes or amendments once approved by respective GM Finance
shall be processed in the Automated Accounting Software and an updated chart of
account generated.
WAPDA shall be using automated accounting software to record accounting
transactions. The software shall provide for separate, self-balancing sets of accounts
in accordance with provisions of the applicable laws.
All accounting information shall be organized in respective wings of WAPDAs financial
system by using the standard Chart of Accounts.
5.3 ELEMENTS OF CHART OF ACCOUNTS
The elements of chart of accounts shall form the basis for the recording, organizing
and reporting of financial information. These elements shall appear on the various
reports and forms generated in the respective accounting unit.
The account code comprises of ten (10) digits divided into four parts or elements:
i. Group level (first 2 digits)
ii. Control level (next 2 digit)
iii. Sub Control level (next 2 digits)
iv. Subsidiary Account level (last 4 digits).
The following diagram illustrates the account code structure: (a-b-c-d)
Sr. No. Account Title Range of Codes

1 ASSETS 01 to 29
2 CAPITAL AND RESERVES 30 to 31
3 LIABILITIES 32 to 48
4 INCOME 52 to 55
5 EXPENSES 60 to 98
5.3.1 Group Level
Group level account code shall be a two digits code describing transactions
affecting assets, liabilities, capital & reserves and income & expenditures.
The following are some of the examples of group level code:

Group Level Code Account Title

01 OPERATING FIXED ASSETS/ COST
02 ACC. DEPRECIATION OPERATING FIXED ASSETS
03 ASSETS UNDER IJARAH FINANCE
5.3.2 Control Level
The control level account code shall be assigned two digits code to indicate
transactions affecting long term liabilities, current liabilities, fixed assets,
operational expenditures etc.
Following are examples of codes to be used to describe control level account code:
Control Level Code Account Title
0105 LAND
0126 OFFICE EQUIPMENT
0127 FURNITURE AND FIXTURES
5.3.3 Sub Control Level Code
The sub-account code shall be assigned two digits code by the related wing to
indicate transactions affecting accrued expenses, revenues current portion of non-
current liabilities, land, vehicles etc.
Following are examples of codes to be used to describe sub control level account
code:
Sub Control
Account Title
Level Code
010510 FREEHOLD LAND
010520 LEASEHOLD LAND
012610 OFFICE EQUIPMENT
5.3.4 Subsidiary-Account Code
The subsidiary-account level code shall be assigned a four digit code by the
respective accounting unit to indicate occurrences of transactions.
Following are examples of codes to be used to describe subsidiary account code:
Subsidiary-Account
Account Title
Level Code
0225450000 ACC. DEPR. G/P ASSETS-COMMUNICATION EQUIPMENT
0225450010 ACC. DEPR. C EQUIPMENT-AUDIO VIDEO EQUIPMENT
0225450020 ACC. DEPR. C EQUIPMENT OTHERS

5.4 DISTRIBUTION OF CHART OF ACCOUNTS
All employees of WAPDA who are responsible for coding of accounts, preparation of
vouchers and data entry in the automated system or have been assigned budget
preparation responsibilities shall be issued a current chart of accounts. An updated copy
of chart of accounts shall be distributed to these individuals as and when it is revised.
The following detailed procedures shall be implemented to ensure complete
adoption of Chart of Accounts:
i. Documented Financial Work Plan that includes all the relevant documents
required for the adoption of chart of accounts shall be completed and
delivered to the GM Finance as and when required(for example on launch of
a new project or introduction of a levy by the Federal or Provincial
Government) .
ii. Regular data and chart of accounts integrity checks via a compliance
database shall be performed.
iii. Annual review of all transactions occurred during the year shall be
performed.
iv. End year financial budgetary procedures shall be followed.
v. The institutional procedures regarding appropriate accounting transactions
shall be followed.
5.5 DETAILED SUBSIDIARY GL ACCOUNT
Each transaction under double entry accounting system will be recorded in the detailed
subsidiary GL account (last 4 digits of the 10 digit account code). The format of which is
provided at Annexure 3.

6 ACCOUNTING RECORDS
6.1 INTRODUCTION
The maintenance of accounting records is the responsibility of the respective

Accounting unit/Department. It has following objectives:
i. The creation and recording of authentic and reliable records to demonstrate
evidence of accountability and information about the decisions and
activities carried out.
ii. Secure the maintenance and preservation of access to the accounting
records, as long as they are required to support the operations.
iii. Secure the identification and archiving of accounting records considered
worthy of permanent preservation.
iv. Bringing administrative and financial benefits to WAPDA.
v. Adherence to all legal obligations.
6.2 RESPONSIBILITY
Accounting unit head shall be responsible for maintenance of accounting records

and shall be accountable to Respective GM Finance. The accounting records and
supporting documents shall be retained in custody for a period as mentioned in
6.3.5 below.
6.3 PROCEDURE
6.3.1 Proper Book Keeping
The respective Accounting Unit shall properly retain active financial records which
are required to ensure the completeness and accuracy of required information in
proper way for easy access and retrieval of accounting records.
6.3.2 Double-Entry Book Keeping
1. Double-entry book-keeping is based on certain fairly simple principles (a)

every transaction which can be expressed in terms of money can be
recorded in books of account; (b) for every transaction which can be
expressed in terms of money there is an account which receives the benefit
and there is a corresponding account which gives the benefit; (c) The
account which receives the benefit is debited and the account which gives
the benefit is credited.
2. Recording of a transaction in the books of account requires two steps; first
to record in a register or a book or a voucher the name of the account
which is to be debited and the name of the account which is to be credited,
and, secondly to group together all debits and all credits which relate to
one particular account.

3. Cash Book, however, records all items relating to each both debits and
credits. In fact, a Cash Book combined the functions of both a Journal and
Ledger Account. When a Cash Book is used for recording both types of
transactions separate columns are used for cash and for bank, and ledger
accounts for both cash and bank are maintained in the Cash Book.
6.3.3 Prevention of Unauthorized Access
WAPDA has installed an Automated Accounting Software as an automated ledger

account maintenance system that provides up-to-the minute balances in all ledger
accounts whenever data relating to a completed transaction is entered. This
system is based on the double entry book-keeping concept. Access to the
Accounting Software and data shall be controlled by issuing user password to
authorized personnel of the Budget and Accounts Office to prevent unauthorized
alterations to financial data. Cross-referencing and indexing of ledger accounts,
transactions, and control records has been provided in the system to ensure a high
degree of resistance to unauthorized alteration of the data files and to provide for
traceability of all entries and postings.
6.3.4 Disaster Recovery and Planning
The following shall be a list of the most common strategies adopted by WAPDA and
its projects/formations for data protection.
i. Backups shall be made on Compact Discs and sent off-site at regular
intervals.
ii. Replication of data to an off-site location, which overcomes the need to
restore the data.
6.3.5 Retention Period
The retaining period of vouchers and supporting documents ledgers, audited

accounts and other supporting financial records shall be as under:
Category A Maintained Permanently

Sr. # Type of Records Form of Record
1 Cash Vouchers Files
2 Cash Books Register
3 Bank Business Files Files
4 General Ledger Register
5 Financial Statements Reports
6 Audit Reports Reports
7 Project Reports Reports
Category B Maintained for 10 Years

Sr. # Type of Records Form of Record
1 Bank Statements Files
2 Receipt Files Files
3 Release Register Register
4 Trial Balances Files

5 Misc. Receipt Register Register

6 Loan & Advances Register
7 Release Files (Loan & Advances) Files
Apart from the specifically described records the following shall be the
retention period for various records as prescribed by the Federal Government
in concurrence with the Auditor General, Pakistan:
DESCRIPTION OF RECORDS PERIOD OF PRESERVATION

NUMBER OF YEARS
Register of contingent expenditure 5
Detailed budget estimates of an office 5
Travelling allowance bills and 3

acquaintance rolls relating there to
Service Books 5 years after death or

retirement whichever is
earlier
Leave account of non-gazette 5 years after death or

Government servants retirement whichever is
earlier
Cases in which invalid pensions have 2 or 3 years after the death

been sanctioned of the pensioner.
Other pension cases 5 years after retirement.
Statement of monthly progressive 2

expenditure and correspondence
relating to discrepancy in the figures
Pay-bills, and acquaintance rolls where 2

these are maintained separately, of
Government servants for whom service
books or service rolls are maintained.
Pay-bills or other classes of Government 6

servants and acquaintance rolls for pay
and allowances (other than travelling
allowance) when maintained
separately.

Muster rolls Such period as may be

prescribed in this behalf in
the departmental
regulations subject to a
minimum of three
accounting years
excluding the year of
payment
6.3.6 Disposition
The purpose of disposal or destruction is to permanently remove unnecessary

records from active use. The destruction of such records is executed to avoid the
possibility that information could be reconstructed to have an unfair advantage. All
the unnecessary records shall be disposed off after the retention period has expired.
The following steps shall be involved in disposal of records:
i. Identify the records specifically, their location and content. For example,
correspondence files, financial records, etc.
ii. Scan the records before disposal.
iii. Examine the records - this may involve reading or scanning the contents of a
file or a sample of forms to determine what the record or file is all about.
The file title is not always an accurate reflection of a files contents as it
may have changed over time or may contain papers on a variety of
unrelated subjects.
iv. Ensure that the records have been properly checked to make it certain that
only those records are disposed off that are no longer required or are
considered to be inactive.
v. Write the disposal date on the outside front cover of files and folders. For
example, RP for Retain Permanently or DE 2015, for Destroy end of 2015.
vi. Create an itemized list of all records for proposed destruction. This list
should be forwarded to GM Finance for approval. A copy should be kept in
Budget and Accounts Office as record.
When the disposal date for records is reached, appropriate arrangements for their
destruction must be made. Records containing any personal details about
individuals, information given in confidence or considered commercial, legal or
financial in confidence should be shredded or placed into confidential waste bins.
Routine records can be destroyed using usual methods of recycling or waste
disposal.

7 ACCOUNTING FOR FIXED ASSETS

7.1 TANGIBLE AND INTANGIBLE ASSETS
WAPDA shall have fixed assets accounting procedures to ensure:
i. All fixed assets are recorded in the books of WAPDA.

ii. All fixed assets are valued correctly.
iii. Depreciation is charged correctly as per WAPDA policy on all fixed assets.
iv. All fixed assets are insured against all known risks.
v. All fixed assets are legally and physically in the possession of WAPDA.
a) The following chart depicts the flow of capital expenditure. Purpose of this
policy is to ensure that capital expenditure by WAPDA is planned,
evaluated, authorized, implemented, monitored, reported and recorded in
a systematic manner to meet the objectives of best practices.
b) This Policy on fixed assets has been designed to ensure proper
accountability and recording of WAPDA fixed assets, their acquisition and
capitalization in accordance with approved accounting standards as
applicable in Pakistan.
c) The tangible fixed assets acquired, capitalized or being used by WAPDA may
include the following categories of assets:
1. Land
2. Buildings and civil works
3. Generation Plant and Equipment
4. Dams and reservoirs
5. General/plant assets
6. Machine and Allied Equipment
7. Office Equipment
8. Furniture and Fixtures
9. Transportation Equipment/Vehicles
10. Computers
d) The intangible fixed assets acquired, capitalized or being used by WAPDA
may include:
1. Computer software
2. Intellectual Property - where WAPDA provides funding, background
information, product samples, or confidential proprietary data for a
project.
7.1.1 Responsibility
1. The respective GM in coordination with respective GM Finance shall have

the overall responsibility for the establishment of effective internal controls

for the recording, safe guarding and proper management of fixed assets
under their Administrative Control.
2. The respective GM Finance alongwith the GMs concerned under whose usage
the assets are, shall implement, monitor and maintain controls over the
recording of fixed assets to ensure:
i. Accuracy of the records
ii. Safeguarding of assets
iii. Improper disposal is avoided
3. The respective DDO shall be responsible for proper accounting, recording

and capitalization of fixed assets at the projects/formations
4. The DDO shall be responsible for proper physical management of fixed

assets.
7.1.2 Procedures
The respective GM Finance shall prepare, update and monitor procedures for the
effective and accurate accounting and recording of fixed assets and its
implementation shall be ensured by the responsible DDO. The following procedures
are made part of this manual:
i. There shall be a fixed assets accounting, recording and management system

for WAPDA and all its formations.
ii. There shall be common policies and procedures for acquisition and
capitalization of fixed assets of WAPDA including standard useful life,
depreciation methods, amortization, impairment losses, etc.
iii. All fixed assets accounting and recording of transactions shall be automated
to minimize manual journal entries and to support the overall monthly
closing.
iv. Fixed assets ledgers shall be integrated with financial accounting for
summary level acquisition, depreciation, amortization, improvements and
disposal data.
v. Periodic reconciliation of the underlying record of fixed assets with the
accounting records (general ledger) shall be made at regular intervals.
vi. Periodic reconciliation of physical inventory of fixed assets with the fixed
assets records shall be made properly in a timely manner.
vii. Owned fixed assets including all acquisitions- past, present and future- shall
be recorded at an amount equal to the cost or at its fair value, which ever
is lower.
viii. Depreciation, amortization and impairment losses shall be calculated in
accordance with the approved depreciation, amortization and impairment
methods and rates applicable to the fixed asset.

ix. Normal repairs and maintenance shall be charged to expenses, as and when
incurred. Major renewals and improvements shall be capitalized as per the
capitalization policy.
7.1.3 Fixed Assets Acquisition and Capitalization
1. It is the policy of WAPDA that the cost of an item of fixed and tangible
asset shall be recognized as an asset if:
i. It is probable that future economic benefits associated with the item
will flow to the entity.
ii. The cost of the item can be measured reliably.
2. An asset shall be classified as a fixed asset and required to be recorded in
the fixed asset register when it meets all of the following additional
criteria:
i. The asset has an estimated useful life of greater than 1 year.
ii. The asset has not been purchased with the intention of resale or
donating for charitable purposes.
3. Expenditure may be capitalized if it is expenditure on an existing asset and
the expenditure was incurred to improve the assets functionality, not
merely to reinstate its future economic benefits (e.g. repairs and
maintenance).
4. Spare parts may be capitalized where they meet the capitalization
threshold and they are expected to be used over more than one year.
5. Once it has been established that an asset meets the criteria for
recognition, it shall be recorded in the fixed assets register at cost price (or
cash price equivalent if purchased using deferred payment and/or foreign
currency).
7.1.4 Recording of Fixed Assets on Acquisition
1. Fixed assets shall be recorded at cost initially on acquisition. Cost includes

all costs necessary to bring the asset to working condition for its intended
use which includes the following costs:
i. Purchase price, including import duties and non refundable purchase
taxes, after deducting trade discounts and rebates.
ii. Any costs directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the manner
intended by WAPDA management.
iii. Examples of directly attributable costs are:
a) Costs of site preparation.
b) Initial delivery and handling costs.
c) Installation and handling costs.
d) Costs of testing whether the asset is functioning properly.

e) Professional fees.
2. Costs of day-to-day servicing of the fixed assets are not recognized in its
carrying amount or fair value. These costs are expensed out as incurred.
Costs of day-to-day servicing are primarily the costs of labour and
consumables, and may include the cost of small parts. The purpose of these
expenditures is the repair and maintenance of fixed assets.
3. The cost of a fixed asset is the cash price equivalent at the recognition
date. If payment is deferred beyond normal credit terms, the difference
between the cash price equivalent and the total payment shall be
recognized as interest expense proportionately over the period of credit.
7.1.5 Trade in of Fixed Assets
1. If fixed assets are acquired in exchange for a non-monetary asset or assets,

or a combination of monetary and non-monetary assets, the cost of such an
asset shall be measured at fair value unless:
i. The exchange transaction lacks commercial substance or
ii. The fair value of neither the asset received nor the asset given up is
reliably measurable.
2. The acquired asset shall be measured in this way even if the asset given is
not derecognized immediately. If the acquired asset is not measured at fair
value, its cost shall be measured at the carrying amount of the asset given
up plus / minus any cash given / received.
7.1.6 Measuring the Fixed Asset After Acquisition
After recognition as an asset, the fixed asset shall be recognized at cost less any
accumulated depreciation and any accumulated impairment losses.
7.1.7 Capitalization of Expenditure
All tangible fixed assets having estimated useful life of at least one year or more
shall be capitalized and shall include but not limited to:
i. Land
ii. Buildings and Civil Works
iii. Machinery/Equipment
iv. Computers
v. Furniture & fixture
vi. Vehicles
vii. Office Equipment and Electric Equipment
viii. Tools and Plants

The DDO shall maintain information regarding the fixed assets and shall ensure that
all additions and disposals are timely transmitted to the B&AO for proper
accounting and updating of fixed assets records.
7.1.7.1 Land
1. The land acquired by WAPDA through outright purchase, transfer or donation

shall be capitalized at cost or fair value depending upon mode of acquisition.
The cost of land shall include all costs connected with acquisition or its fair
value and costs incurred to prepare the land for its intended purpose.
2. Costs to be capitalized shall include:
i. The purchase price of land or its fair value in case of donations. Additional
professional costs such as legal, registration and title fees, surveying fees,
appraisal fees, real estate commissions, escrow fees, and damage
payments.
ii. Payment of non-refundable taxes accrued on the land at the date of
purchase if payable by the purchaser.
3. Expenditures for demolishing any buildings which were acquired with the land
to make the land available for new construction or other use. Any salvage
values resulting from the sale of building material and related building
facilities shall be credited to miscellaneous income.
4. The cost of perpetual easements or rights of way.
5. Fees for surveys, title searches, geological testing, legal, and other expert
services incidental to the acquisition of land.
6. The following costs shall not be capitalized:
i. Expenditures relating to the disposal.
ii. Fees for surveys, title searches, etc., applicable to land which was not
acquired for any reason what so ever.
iii. The cost of easements or rights of way which are limited as to time.
7. All acquisition of land shall be accounted and recorded in a new account code
generated in chart of accounts.
Accounting Entries:
i. When land is acquired on credit:
Entry 1
Account Title G/Ledger code
Dr. Land Relevant code
Cr. Account payable Relevant code
Entry 2
Dr. Account Payable Relevant code

Cr. Cash / Bank Relevant code

For more details of account codes please see Appendix-1.
7.1.7.2 Buildings and Civil Works
1. Buildings that are permanent in nature and have a useful life of greater
than one year shall be capitalized.
2. Buildings shall be charged with the initial cost of basic building structures
including building foundations, outside walls (or siding), sub-flooring, rough
ceilings, interior walls of a load-bearing character, roofs (excluding
coverings), elevator shafts, stairs and railings, and other such integral or
structural components.
3. Other costs to be capitalized as part of a building shall include:
i. Cost of building permits.
ii. Architectural, engineering, drafting, and other expert services
attributable to the construction of the building.
iii. Extraordinary costs which are inherent construction risk, such as
rock blasting, piling, or relocation of the channel of an underground
stream.
iv. Interest paid to an external entity on funds used to finance
construction during the construction period.
v. Insurance premiums connected with acquisition.
4. The following costs shall not be capitalized:
i. Extraordinary costs incidental to the erection of a building, such as
those due to strike, flood, fire or other calamity.
ii. Cost of incomplete construction that is subsequently abandoned,
including the cost of demolition of such partially completed
construction and related clean up costs.
5. When building is under construction, all expenses incidental to the
construction of building shall be debited to account code Capital Work in
Progress given in the chart of accounts. All buildings acquired shall be
debited to the relevant building account code. Construction costs after
completion of Buildings shall be transferred from Capital Work in Progress
account and their costs shall be debited to the relevant Building account
code.
7.1.7.3 Machinery/ Equipment
1. The purchase/acquisition cost of Machinery/Equipment having a useful life

of greater than one year shall be capitalized.
i. Original contract or invoice price
ii. Freight charges

iii. Professional services

iv. Import duties
v. Handling and storage charges
vi. In-transit insurance charges
vii. Sales, use, and other non-refundable taxes imposed on the acquisition
viii. Installation charges
ix. Charges for testing and preparation for use
x. Costs of reconditioning used items when purchased
xi. Parts and labor associated with the construction / installation of
equipment
3. All repairs & minor improvements on owned machinery and equipment will
be debited to expense account.
7.1.7.4 Computers
1. All costs incidental to the purchase/acquisition of computers and its

peripherals shall be capitalized. These shall include Servers, Desktops,
Laptops, printers, scanners, multimedia projectors, barcode readers,
networking equipments etc.
Accounting Entries:
1. When Computers are acquired on credit:
Entry 1

Dr. Computers Relevant code
Entry 2

2. When Computers are acquired on cash:

3. When Computers are acquired through fixed assets fund:


Cr. Fixed Assets Fund Relevant code
2. Hard disks, tape drives, CDs, fax modems, RAMs and other such items
when purchased independently are not to be capitalized and shall be
expensed in the year of purchase.
3. Furthermore, if any part of the computer is replaced, it will not be
capitalized but charged to the expense account.
4. All repairs & minor improvements on owned computers shall be expensed
out.
7.1.7.5 Furniture and Fixtures
1. All costs incurred on purchase/acquisition of Furniture and fixtures shall be

capitalized. The items included in this head are; office tables, chairs, sofas,
file racks, file cabinets, partitions, almirahs, safes, chests, beds, dressing
tables, dining tables and chairs, center and side tables, air conditioners,
fans, room-coolers, electric water coolers and dispensers, refrigerators and
deep freezers, microwave ovens, cooking range, and televisions, blinds,
curtains, carpets.
All other furniture and fixture items shall be expensed out in the year of
purchase.
Accounting Entries:
1. When furniture & fixtures are acquired on credit:
Entry 1
Dr. Furniture & Fixture Relevant code
Entry 2
2. All repairs & minor improvements on owned furniture & fixtures shall be
expensed out.
7.1.7.6 Vehicles
1. Purchase/ acquisition costs of all transport and operational/utility vehicles

shall be capitalized. These may include motorcycles, cycles etc.
2. The costs incidental to the acquisition of vehicles shall include:
i. Purchase price

ii. Transportation
iii. Registration Charges
iv. Non-refundable taxes & duties
3. All repairs & minor improvements on vehicles shall also be expensed out.
7.1.7.7 Office & Electric Equipment
1. Purchase/ acquisition costs of Office & Electric Equipment shall be

capitalized. The criteria mentioned in Fixed Assets Acquisition and
Capitalizations shall be fulfilled. The items under this head shall include
photocopy machines, facsimile machines, typewriters, cyclostyling machine,
reproduction machines, shredders, UPS, stabilizers and telephone
exchanges.
i. Original contract or invoice price
ii. Freight charges
iii. Import duties
iv. Handling and storage charges
v. In-transit insurance charges
vi. Sales, use, and other non-refundable taxes imposed on the acquisition
vii. Installation charges
viii. Charges for testing and preparation for use
ix. Costs of reconditioning used items when purchased
x. Parts and labor associated with the construction / installation of
equipment.
3. However calculators, heaters, telephone sets, UPS batteries and other such
items shall not be capitalized. These items will be charged to expense
account (Office Supplies).
4. All repairs & minor improvements on office & electric equipment will be
debited to expense account.
7.1.8 Accounting of T&P
1. In construction projects the Tools and Plant purchases for different works
will be treated to have been made for the project as a whole. The cost of
such T & P will be booked by the Budget and Accounts Officer under a
separate distinct Head Project T & P in the General Ledger. For purposes
of Control Division-wise priced subsidiary ledger will be maintained by the
Budget and Accounts Officer in the prescribed formats under the following
sub-heads:-
i. C. Camp Equipment
ii. E. Electrical Equipment (Air-conditioners, refrigerators etc.)

iii. F. Furniture and Fixture

iv. H. Hospital Equipment
v. L. Library
vi. N. Navigation Plant
vii. O. Office Machine and Equipment
viii. P. Plant and Machinery
ix. Ph. Photographic Equipment
x. S. Scientific and Drawing Instruments
xi. T. Tools
xii. V. Vehicles
xiii. M. Miscellaneous T & P
2. The cost of repairs and carriage of T & P will be charged to a separate head
in the General Ledger called Repairs and Carriage of T & P. A subsidiary
ledger of the expenditure incurred may also be maintained under the sub-
heads 1 to 13 enumerated above. However, charges like custom duty, sales
tax, ocean and railway freight which often involve substantial amounts
should be added to the cost of individual items and charged to the head
Project T & P.
3. The Budget and Accounts Officer will be responsible for maintaining
quantity as well as value account of T & P. The DDO or the caretaker or
storekeeper will however, only be required to keep the numerical account
of T & P articles in the manner as explained in the subsequent paragraphs.
In order to delineate the responsibility of DDO/Project Director concerned
will through an administrative order establish specific units in his
organization for preparation and submission of T & P Accounts. Such units
will be called accounting unit for the purposes of accounting. The Store
Division which is normally the recipient of T & P in the first instance will
keep a separate account of T & P and will not in any way mix it up with the
stores account. The GRN prepared by the Store Division for T & P will be
distinctly marked as T & P so that it may be charged to Head of
Account Project T & P in the books of the Project.
4. Numerical accounts of articles should be kept in accordance with the
following rules, a separate set of account being maintained in each Sub-
Division and one in the DDO except when otherwise ordered by the Project
Director.
5. The rules relating to numerical accounts of tools and plant apply also to
imperishable articles, e.g. typewriters, furniture of rest houses etc.,
whether acquired against payment or free of cost.
6. The accounts of tools and plant issued for use by subordinate of the Sub-
Division, or temporarily lent to contractors, as well as, those lent to local
bodies and others, under orders of competent authority, should be specially
reviewed periodically, and it should be seen that the articles are returned
without unnecessary delay and in good condition.

Note: This paragraph also applies to tools and plant sent out for repairs.
7.1.9 Donated Assets
Donations of all assets shall be reported to the GM Co-ordination/respective GM

Finance who will maintain donor records so that there is complete and accurate
cumulative history of such assets. Donations when received shall be recorded at
their fair market values. Fair value equals the amount at which an asset could be
exchanged in a current transaction between knowledgeable willing parties.
7.1.10 Repairs and Improvements
All costs of repairs / improvements shall be expensed in the year of undertaking

the activities.
Major overhauling and replacement
The cost of faulty parts and equipments replaced during the process of major
overhauls and refurbishments shall be capitalized and will be depreciated at the
rate of 15% per annum. The value of the replaced part shall be treated as
miscellaneous income in the year of disposal.
Ammortisation of grant
If faulty parts and equipment has been replaced by using the grant from GoP or
other agencies, the grant will be amortised at the rate of 15% per annum.
7.1.11 Fixed Assets Register
1. WAPDA shall maintain a central and formation wise record of fixed assets in
the respective accounting formation. The central and formation wise record
of fixed assets shall be referred to as the Fixed Assets Register (Annexure-4)
which shall list down the following details:
i. Description of the asset
ii. Location of the asset
iii. Cost
iv. Current depreciated amount
v. Depreciation written off to date
vi. Estimated useful life of asset
vii. Assets residual value
viii. Mode of acquisition purchase, lease or donation
ix. Date of acquisition
2. Any addition or deletion in the fixed assets register shall be made after

approval of the respective DDO.

3. A record of fixed assets and their values shall be kept in order to:
i. Provide information to WAPDA management about the assets under its
use & control.
ii. Provide information for management decision-making purposes.
iii. Provide information for external reporting purposes.
iv. Enable WAPDA to calculate annual depreciation and losses/gains on
the sale of assets.
4. The respective Budget & Accounts Officer shall maintain the fixed assets
register as inventory record. The respective DDO shall be responsible to
ensure that fixed assets register of WAPDA is properly maintained and
updated.
5. The WAPDA will also maintain fixed asset record centrally, to control the
location wise assets. Separate fixed assets memorandum records will also
be maintained at different locations like projects, formations, stores etc.,
so that at any time the information regarding the asset can be verified
during physical verification and cross referred with the main Fixed Assets
Register.
7.1.11.1 Contents of Fixed Assets Register
The Fixed Assets Register shall contain information and details of fixed assets that
are brief and meaningful like:
i. The date on which the asset was acquired or brought into use
ii. The location of the asset
iii. The title deed number, in the case of fixed property
iv. The stand number, in the case of fixed property
v. Where applicable, the identification number, model number
vi. The original cost, or the revalued amount or the fair value if no costs
are available
vii. The (last) revaluation date of the fixed assets subject to revaluation
viii. Who did the (last) revaluation
ix. Accumulated depreciation to date
x. The depreciation charge for the current financial year
xi. The carrying value of the asset
xii. The method and rate of depreciation
xiii. Impairment losses incurred during the financial year (and the reversal
of such losses, where applicable)
xiv. The source of financing
xv. The current insurance arrangements

xvi. What kind of services are being performed by the asset

xvii. Whether the asset has been used to secure any debt, and if so, the
nature and duration of such security arrangements.
xviii. The date on which the asset is disposed off
xix. The disposal price
xx. The date on which the asset is retired from use, if not disposed off.
7.1.11.2 Recording of Fixed Assets in Register
1. All DDO under whose control any fixed asset falls shall promptly inform the
relevant GM Finance about the change or acquisition of fixed asset and
provide the relevant GM Finance in writing with any information required to
compile the fixed asset register, and shall promptly advise him in writing of
any material change which may occur in respect of such information.
2. A fixed asset shall be capitalized, that is, recorded in the fixed assets
register, as soon as it is acquired. If the asset is constructed over a period
of time, it shall be recorded as work-in-progress until it is available for use,
where after it shall be appropriately capitalized as a fixed asset.
3. A fixed asset shall remain in the fixed assets register for as long as it is in
physical existence. The fact that a fixed asset has been fully depreciated
shall not in itself be a reason for writing-off such an asset.
4. If leased assets are obtained by WAPDA only assets which are subject to a
Finance Lease are entered into the Assets Register. Assets which are subject
to operating leases are not entered into the Assets Register. The leased
assets should be recorded separately of owned assets of WAPDA.
5. Assets received as a donation shall also be recorded in the Fixed Assets
register at the time, the asset is received.
6. In case of part payments for assets purchased these assets for which
advance hasbeen paid shall not be recorded in assets register until full
payment has been made and the asset is installed and ready for use.
7. In case of any heritage assets for which no original costs or fair values are
available and it is believed that the determination of a fair value for the
assets in question will be a laborious or expensive undertaking, such asset
or assets shall be recorded in the fixed assets register at a notional value of
Rupee one.
7.1.11.3 Updating the Fixed Asset Register
1. The DDO shall be responsible for maintaining and updating the fixed assets
register.
2. All changes in the particulars, composition or class of any fixed asset shall
be communicated to the Budget & Accounts Officer by the Custodian of
Assets, in writing.
3. The B&AO shall incorporate these changes in the fixed assets register as and
when these are communicated by the Custodian of Assets.

4. The DDO shall keep the fixed assets register in custody and nobody shall be
allowed to make changes in the register except with approval from the
relevant GM Finance.
5. Physical count of fixed assets shall be carried out on annually basis and the
physical inventory shall be reconciled with the fixed assets register and
adjusted accordingly.
7.1.11.4 Safe keeping of Assets
1. Every DDO shall be directly responsible for the physical safekeeping of any
fixed asset controlled or used by the respective DDO.
2. In exercising this responsibility, every DDO shall adhere to any written
directives issued by the respective GM Finance to the DDO in question, or
generally to all DDO, in regard to the control of or safekeeping of the fixed
assets.
7.1.11.5 Identification of Fixed Assets
1. The respective GM Finance shall design, develop and implement a fixed

assets identification system in consultation with the DDO.
2. The respective GM Finance shall ensure that the fixed asset identification
system that has been implemented complies with the requirements of the
computerized / manual fixed asset register.
3. The fixed assets identification system shall comply with any legal
requirements, as well as any recommendations of the internal / external
auditors and shall be decided upon within the context of the budgetary and
human resources.
4. Every head of department shall ensure that the asset identification system
is scrupulously applied in respect of all fixed assets controlled or used by
the relevant formations, Projects etc.
7.1.11.6 Effect of Errors or Inaccurate Changes in Register
1. The respective DDO shall be responsible for accurate recording of assets in

the fixed assets register and any change therein.
2. Inaccurate addition or changes to the fixed asset register may result in the
following errors:
i. An unclear fixed asset description may cause an incorrect
classification of assets, resulting in incorrect calculations in
depreciation.
ii. An unclear fixed asset location may result in the fixed asset being lost
or misplaced.
iii. An incorrect purchase price or an invalid date of acquisition may result
in an incorrect calculation or recording of depreciation.
iv. An invalid depreciation rate may result in an incorrect calculation of
depreciation.
v. Fixed assets register will be rectified by the respective DDO only and

he will be responsible for all errors in the register.
7.1.12 Leased Assets
1. WAPDA shall acquire assets or any property on lease only for purposes that
contribute to its objectives.
2. All departments & officials shall be responsible for overseeing the proper
use of leased property assigned to them.
3. The person authorized by the Authority shall form a Leased Assets
Committee to oversee the selection, approval and administration of lease.
The Leased Assets Committee shall be accountable to the Authority.
4. The following shall be the members of the Leased Assets Committee:
i. The General Manager Finance(concerned)
ii. The GM (CCC)
iii. The Project Director
iv. Manager Administration
v. Director Legal
5. The Authority may nominate any person as the signing authority for all lease
agreements and related documentation.
6. A written lease or license or other appropriate agreement shall be entered
into regardless of duration of use or amount of lease rental to be paid. The
lease shall be recorded in accordance with the rules applicable to WAPDA.
7. The Budget & Account Officer shall be responsible for proper accounting
and recording of leased assets.
7.1.12.1 Approval of Lease
1. The Leased Assets Committee shall evaluate the proposal prepared by the
Chief Engineer to lease or buy an asset.
2. The Committee shall take into consideration the following criteria to
identify the type of lease that is most appropriate:
i. Technical and operational useful life of the leased assets.
ii. Likelihood of continued use beyond the lease term.
iii. Budgeting issues.
iv. Financing terms (term of lease, cost of borrowing).
v. Type of lease (Operating vs. Finance) and its financial impact.
3. Once the proposal is evaluated by the Leased Assets Committee it shall be
presented to the Authority for approval.
4. The PD/DDO/Chief Engineer concerned shall complete the documentation
of lease and negotiations with the financial institution on behalf of WAPDA.

7.1.12.2 Initial Recognition of Finance Leases
1. A lease is classified as a finance lease if it transfers substantially all the

risks and rewards incidental to ownership and a lease is classified as an
operating lease if it does not transfer substantially all the risks and rewards
incidental to ownership.
2. Following are the situations that individually or in combination would
normally lead to a lease being classified as a finance lease:
i. The lease transfers ownership of the asset to WAPDA by the end of the
lease term;
ii. WAPDA has the option to purchase the asset at a price that is expected
to be sufficiently lower than the fair value at the date the option
becomes exercisable and for it to be reasonably certain, at the
inception of the lease, that the option will be exercised;
iii. The lease term is for the major part of the economic life of the asset
even if title is not transferred;
iv. At the inception of the lease the present value of the minimum lease
payments amounts to at least substantially all of the fair value of the
leased asset; and
v. The leased assets are of such a specialized nature that only WAPDA can
use them without major modifications.
vi. The finance lease shall be recorded as an asset and a liability in the
books of accounts at cost and principal liability of the leased asset. Any
initial direct costs incurred by WAPDA are added to the amount
recognized as an asset.
Accounting Entries:
i. When leased asset is acquired:
Dr. Leased Asset Relevant code
Cr. Leased Liability Relevant code
When payment is made to the lessor:
Dr. Leased Liability Relevant code
Dr. Finance Charge Relevant code
Cr. Bank Relevant code
7.1.12.3 Subsequent Measurement of Finance Leases
1. Minimum lease payments made to the financial institution shall be

apportioned between the finance charge and the reduction of the
outstanding principal liability in accordance with the lease payment
schedule. The finance charge shall be allocated to each period during the
lease term so as to produce a constant periodic rate of mark-up on the

remaining balance of the liability. Rent is charged as expense in the period

in which it is incurred.
2. A finance lease gives rise to depreciation expense for depreciable assets as
well as finance expense for each accounting period. The depreciation policy
for depreciable leased assets shall be consistent with that of depreciable
assets that are owned.
7.1.12.4 Operating Leases
1. Lease payments under an operating lease shall be recorded as an expense

on a straight-line basis over the lease term or any other systematic basis if
it is more representative of the time pattern of the benefits.
2. The operating leases shall not be recorded as an asset in the books of
accounts like the finance leases.
Accounting Entries:
When lease rental is due:
Dr. Lease Rentals Relevant code
Cr. Lease Rentals Payable Relevant code
When lease rental is paid to the lessor:

Dr. Lease Rental Payable Relevant code
7.1.12.5 Ijarah Rentals
1. Ijarah payments are recorded as an expense on a straight-line basis over the

term of the agreement.
2. The Ijarah asset is not to be recorded as an asset in the books of accounts.
Accounting Entries:
When Ijarah rental is due:
Dr. Ijarah Rental Relevant code
Cr. Ijarah Rentals Payable Relevant code
When Ijarah rental is paid:
Dr. Ijarah Rentals Payable Relevant code

7.1.12.6 Lease Amendment Procedure
Existing leases can be amended only with the recommendation of Leased Assets
Committee and only if:
i. New arrangement demonstrates an economically feasible program to
WAPDA over the remaining term of the lease;
ii. There is a change in the asset specification or a new asset has been added
to the assets already under lease arrangement.
7.1.13 Depreciation of Fixed Assets
1. All fixed assets of WAPDA shall be depreciated on straight line method over
their estimated useful life at the rates given in the following paragraphs to
reflect their accurate net asset value.
2. Fixed assets shall be depreciated over their estimated useful lives unless
they are inexhaustible. Depreciation on additions to operating fixed assets
shall be charged from the month in which the asset is acquired or
capitalized, while no depreciation shall be charged for the month in which
the asset is disposed off.
3. The respective DDO shall be responsible for proper calculation, accounting
and recording of depreciation.
7.1.13.1 Depreciation Amount and Depreciation Method
1. The depreciable amount of an asset is allocated on a systematic basis over

its useful life and is depreciated using straight line method.
2. The depreciation expense for each period shall be charged to income unless
it is included in the carrying amount of another asset. Sometimes, the
future economic benefits embodied in an asset are absorbed in producing
other assets. In this case, the depreciation charge constitutes part of the
cost of the other asset and is included in its carrying amount.
3. Each part of fixed asset with a cost that is significant in relation to the total
cost of the fixed asset shall be depreciated separately.
4. The residual value and the useful life of an asset shall be reviewed at each
financial year-end and, if expectations differ from previous estimates, the
change shall be incorporated in the fixed assets register.
5. Depreciation of an asset shall begin when it is available for use, i.e., when
it is in the location and condition necessary for it to be capable of operating
in the manner intended by WAPDA management.
6. Depreciation of an asset shall cease when the asset is derecognized i.e.
disposed of, destroyed, scraped or become obsolete. Therefore,
depreciation does not cease when the asset becomes idle or is retired from
active use and held for disposal unless the asset is fully depreciated.

7.1.13.2 Factors to be Considered in Determining Useful Life of an Asset
1. Expected usage of the asset. Usage shall be assessed by reference to the

asset's expected capacity or physical output or that is provided in suppliers
manual.
2. Expected physical wear and tear, which will depend on operational factors
such as the number of shifts for which the asset is to be used and the repair
and maintenance program, and the care and maintenance of the asset while
idle.
3. Technical or commercial obsolescence arising from changes or
improvements in production, or from a change in the market demand for
the product or service output of the asset.
4. Legal or similar limits on the use of the asset, such as the expiry dates of
related leases.
5. Land and buildings are separable assets and shall be accounted for
separately. Land has an unlimited useful life and therefore shall not be
depreciated while buildings have a limited useful life and therefore are
depreciable assets.
7.1.13.3 Depreciation Rates
Following depreciation rates shall be used by WAPDA to depreciate its fixed assets:
Residual Depreciation
S.
Description of Assets Years Value Rate
No.
(percentage) (percentage)
1 Civil Works/buildings 50 2 2
Dams & Reservoirs 50 2 2
2 Generation Plant & Equipment
a. Turbines 35 5-20 2.285
Generators (Class F 35 1
b. insulation) 2.82
Generators (Class B 30 1
c. insulation) 3.3
d. GIS Switch Gear 50 0.5 1.99
Switchyard Equipment 25 1
e. (Transformer etc.) 3.96
MV/LV Switch gear control 25 1
f. and production equipment 3.96
g. Telecommunication & SCADA 20 0.25 4.987
h. Cranes 30 1 3.3
Trash Rack and Cleaning 30 1
i. Machines 3.3
j. Truck trailer 20 1 4.95
HV circuit breaker-air blast 25 1
k. type 3.96
l. HV circuit breaker-SF -6 type 30 1 3.3
m. Transmission Line Equipment 25 1 3.96

Residual Depreciation
S.
Description of Assets Years Value Rate
No.
(percentage) (percentage)
3 Mobile Plant & Equipment 5 1 20
Other Equipment (All others except 1
4 computer accessories) 10 10
5 Computers and Accessories 4 1 25
6 Vehicles 5 5 20
7 Assets subject to Ijarah 14 2 7
7.1.13.4 Depreciation Entries
Name of Item G/L Code Dr/Cr Title of Account

Buildings Relevant code Dr. Depreciation
Furniture Relevant code Dr. Depreciation
Computers Relevant code Dr. Depreciation
Machinery/Equipment Relevant code Dr. Depreciation
Vehicles Relevant code Dr. Depreciation
Office & Electric
Relevant code Dr. Depreciation
Equipment
Accumulated
Buildings Relevant code Cr.
Depreciation-Building
Accumulated
Furniture Relevant code Cr.
Depreciation-Furniture
Accumulated
Machinery
Relevant code Cr. Depreciation- Machinery
/Equipment
/Equipment
Accumulated
Computers Relevant code Cr.
Depreciation-Computers
Accumulated
Vehicles Relevant code Cr.
Depreciation-Vehicles
Accumulated
Office & Electric
Relevant code Cr. Depreciation- Office &
Equipment
Electric Equipment
Accumulated
Transformers Relevant code Cr. Depreciation-
Transformers
7.1.14 Impairment of Assets
1. It is the policy of WAPDA to assess annually, as to whether there is any

indication that an asset (or a class of assets) is impaired. If any such
indication exists, the DDO shall estimate the recoverable amount of the
asset in line with approved accounting standards as applicable in Pakistan.
An asset is impaired when its carrying amount exceeds its recoverable
amount.
2. The respective DDO shall document and record the impairment of assets in
the fixed assets register and its documentation shall be made available, for

review by the external auditors of WAPDA for inclusion in the annual

financial statements.
7.1.14.1 Impairment Indicators
1. At the end of each year the DDO shall make assessment to identify appropriate
impairment indicators for each class of asset. These impairment indicators will
then be used to determine if there is an indication of impairment. There are
usually two groups of indicators which may be external or internal.
External indicators are:
i. A significant decline in an assets market value as a result of the passage
of time or normal use.
ii. Significant changes with an adverse effect in the technological, market,
economic or legal environment of the relevant asset.
iii. An increase in market interest rates or other market rates of return on
investments that are likely to increase the discount rate included in the
cash flow calculation when determining value in use.
2. Internal indicators are:
i. Evidence of obsolescence or physical damage to an asset.
ii. Significant changes regarding the way an asset is used or is expected to
be used.
iii. Evidence from internal reporting that indicates that the economic
performance of an asset is, or will be, worse than expected.
7.1.14.2 Assessment of Impairment
At the end of every financial year the DDO in consultation with respective GM
Finance shall determine whether there is any known evidence that an asset or group
of assets is impaired based on the impairment indicators. It is not expected that
each asset would be examined every year to determine if there is an indication of
impairment. For example, the respective DDO will not need to assess each building
but where it is evident that the building was affected by fire during the financial
year then that building would need to be tested for impairment. An indicator is only
relevant if the recoverable amount of the asset or group of assets is sensitive to the
indicator indicating impairment. If there is no evidence of impairment there is no
need to make a formal estimate of recoverable amount.
7.1.14.3 Measuring Recoverable Amount
1. Where there will be an indication of impairment, the DDO shall determine

the recoverable amount. However, the concept of materiality applies in
identifying whether the recoverable amount needs to be estimated. For
example, if previous calculations show that an assets recoverable amount
is significantly greater than its carrying amount, there is no need to re-
estimate the assets recoverable amount if no events have occurred that
would eliminate that difference.
2. Recoverable amount shall be the higher of an assets or cash-generating
units fair value less costs to sell and its value in use.

7.1.14.4 Recognizing and Measuring Impairment Losses
1. Individual Asset
An impairment loss for an individual asset shall be recorded when the
recoverable amount is less than the carrying amount. The amount of the
impairment loss is the difference between the recoverable amount and the
carrying amount.
2. Cash-Generating Unit (CGU)
An impairment loss shall be recorded for a CGU when the recoverable
amount of the unit is less than the units combined carrying amount, the
difference between the two being the amount of the impairment loss. The
DDO will need to reduce the carrying amount of each asset in a CGU on a
pro rata basis, based on the carrying amount of each asset in the unit.
However assets in the unit cannot be reduced below the higher of the
assets fair value less cost to sell (where determinable), value in use (where
determinable) or zero.
7.1.14.5 Accounting Treatment of an Impairment Loss
1. An impairment loss for an individual asset and for each asset in a CGU shall
be recorded in the fixed assets register in the year in which the loss occurs.
2. After the recording of the impairment loss the DDO must also adjust the
depreciation relating to the asset, by reallocating the new carrying amount
in a systematic manner over the remaining useful life of the asset.
Journal Entry:
When asset will be impaired:
Dr. Impairment loss Relevant code
Cr. Accumulated Impairment loss Relevant code
7.1.14.6 Reversing an Impairment Loss
1. At the end of every reporting period, the DDO shall assess whether
impairment losses previously recorded need to be reversed. The DDO will
first determine the indicators to be used in assessing whether a reversal of
impairment has occurred. There are a number of indicators that should be
used when determining whether a reversal of an impairment loss is
required. These indicators are similar to the impairment indicators
mentioned above.
2. The DDO shall consider whether there is an indication of a reversal of an
impairment loss by using the indicators. Where these indicators will provide
evidence that a reversal has occurred, an estimate of the recoverable
amount will be made. Where it will be determined that the recoverable
amount has increased, the impairment loss need to be reversed. However,
reversal of an impairment loss will not be allowed when the change in
recoverable amount merely will result from the unwinding of the cash flow
discounting due to the passage of time.

i. Individual Asset
a) A reversal of an impairment loss for an individual asset cannot
exceed the amount at which that asset would have been recorded
had the asset not been initially impaired and written down.
b) After the reversal of an impairment loss, the DDO will also adjust the
depreciation relating to the asset by reallocating the new carrying
amount in a systematic manner over the remaining useful life of the
asset.
ii. Cash-Generating Unit (CGU)
a) The reversal of an impairment loss relating to a CGU shall be
allocated to each individual asset on a pro rata basis, based on the
carrying amounts of those assets.
b) The amount allocated to each asset cannot be increased above the
lower of:
1. The carrying amount had no impairment loss been recognized
in the prior period; and
2. Its recoverable amount (if determinable).
7.1.14.7 Accounting Treatment of a Reversal of Impairment Loss
A reversal of an impairment loss for an individual asset and for each asset in a CGU
shall be recorded in the fixed assets register in the year in which the reversal occurs.
7.1.14.8 Verification of Assets Criteria
DDO shall determine the dates of the inventory taking and the criteria that will be
used to document that a property item has been accounted for during the
inventory taking. The steps to be followed will be as follows:
i. Establishing starting and ending dates for the inventory.
ii. Producing the list of items for verification.
iii. Establishing the criteria for determining that an item in the inventory base
has been accounted for.
iv. Establishing the reconciliation schedule.
v. Defining the method used to perform the audit of the physical inventory.
vi. Establishing the inventory status-reporting schedule.
vii. A physical inventory of equipment will be taken annually.
7.1.14.9 Controls
1. A control system shall be established by the respective GM Finance/General

Manager concerned/Head Office ensuring adequate safeguards of assets to
prevent loss, damage, or theft. Any loss, damage, or theft will be
investigated and fully documented.

2. In order to ensure objective reporting of inventory items, a physical

verification shall be performed by personnel having no direct responsibility
(custody and receipt/issue authority) for assets subject to the inventory
count. If it is not feasible to use such personnel for any part of the
inventory, then those portions are, at least, tested and verified by a person
with neither direct responsibility for that portion of the inventory nor
supervised by the person directly responsible.
3. Written physical verification instructions shall be documented and
distributed to each person participating in the verification process. The
instructions will describe:
i. How and where to inspect each item.
ii. What information to record.
iii. What to do when they have a question.
iv. What procedures to follow when they finish their assignments.
v. What procedures to follow when equipment is located but not listed.
vi. The procedure by which the person counting the assets attests to the
accuracy of the count, such as by signing his or her name at the
bottom of each inventory page, or signing a cover page for a group of
pages sorted by another method (batches, location, equipment type,
etc.).
vii. How to record assets not being used or in an obviously unserviceable
condition. Such information will be used to schedule repair or
disposition of such assets.
7.1.14.10 Reconciliation
After the physical inventory count is completed, results will be reconciled with the
accounting records. Any differences between quantities determined by the physical
inspection and accounting records will be investigated to determine the causes of
the difference.
The following steps will be followed during the reconciliation process:
i. Search the inventory lists to determine whether inventory noted during the
count as unrecorded is, in fact, listed on another portion of the inventory.
ii. Enter unrecorded assets into the inventory system as soon as possible after
discovery.
iii. If a significant number of unrecorded assets are located, indicating a major
problem with the asset recording procedures, the problem will be identified
and corrected in a timely manner.
7.1.14.11 Lost or Stolen Property
1. In the event of suspected loss or theft, the concerned person or department

shall notify the event immediately to the respective DDO. The respective
DDO will take necessary action as appropriate and initiate an insurance
claim for lost or stolen item in order to:

i. Minimize the loss.

ii. Ensure that investigations are not hampered.
iii. Ensure that improvident settlements are not made.
iv. Ensure that incorrect personnel actions are not taken.
v. Remove the lost or stolen property from the agencys inventory and
accounting records where applicable.
vi. Maintain records for losses of assets in accordance with approved
records retention schedules.
2. After the inventory is reconciled, the respective DDO will certify the
reconciliation. If the certification cannot be made, the respective DDO will
disclose that fact and shall determine the appropriate course of action.
7.1.14.12 Retaining the Physical Verification Record
The certification, together with the reconciliation and the inventory listing, will
serve as the support for the inventory balance and for accounting adjustments, if
any, and will be retained. The retention of this documentation will be in
accordance with the approved records retention schedules.
7.1.15 Insurance of Fixed Assets
1. WAPDA has adopted a policy which ensures maximize benefits and minimize
the costs of insurance cover for assets serving in best interest to provide
effective safeguards against uncertain events resulting in loss or damage to
the assets. This is known as WAPDA Equipment Protection Scheme (WEPS).
This WEPS is an out-come of WAPDAs adverse claims experience from N.I.C. in
respect of Thermal/Hydel Power Houses and Grid Stations during previous
years. WEPS is controlled by a Board of Management which is responsible for
the operation of this Scheme. WEPS is a managed under a Special Protection
Cell which acts as a self finance unit with Director General Insurance WAPDA
as its head. The Scheme generates funds from the premium it charges from
various WAPDA formations which are invested at the discretion of the Board of
Management.
2. All WAPDA Equipment of Grid Stations and Power Houses are protected under
WAPDA Equipment Protection Scheme (WEPS). The functions of this Cell are as
under:
i. It will provide protection to the losses arising out of fire and damage to the
equipments of Power Houses, Grid Stations, WAPDA House, WAPDA
Printing Press, Reclamation Workshops and Research & Test
Laboratories.
ii. The scheme does not cover catastrophic losses such as losses arising out
of natural disaster like Earthquakes, Volcanic eruptions, floods,
Terrorism etc. as defined in the Scheme.

7.1.15.1 Insurance of Other Assets
1. WAPDA shall ensure that procedures exist to establish and maintain program
that will underwrite damage to its assets other than those covered by WEPS
to minimize its exposure and that of its officers and employees to a wide
range of liabilities and protects its reputation.
2. The program shall cover all risks of physical loss or damage. Examples of the
risks covered are as follows:
i. Loss, destruction or damage caused by fire, lightning, storm or storm
water
ii. Earthquake / Landslip / Subsidence
iii. Spoilage
iv. Burglary or theft
v. Accidental damage
3. The DDO through the office of Director General Insurance shall be
responsible for proper management of insurance coverage and dealing with
day to day queries relating to insurance including organizing additional
covers, ensuring whether WAPDA has insurance cover for all assets and the
processing of claims.
4. The DDO shall be responsible for proper accounting and recording of
insurance cost.
7.1.15.2 Reporting of Property Related Losses
1. The loss, suspected loss, or damage to WAPDA property shall be reported as

soon as possible to the WEPS-Cell by the respective DDO with copy to the
respective General Manager Finance.
2. In the event of a theft the WEPS-Cell shall be notified by the DDO to take
appropriate measures for initiation of insurance claim.
3. The DDO shall initiate investigation and will call and inform the Insurer
about the loss or theft. The DDO will prepare documentation for onward
submission to WEPS.
7.1.15.3 Record Keeping
1. A concise, easily referenced schedule of insurance coverage will include, at

a minimum the following:
i. The coverage provided, detailing major exclusions.
ii. The underwriter.
iii. The deductible amount.
iv. The upper limit.
v. The term of the policy.
vi. The date premium(s) is/are due.

vii. The premium amount.

2. Records of losses shall also be maintained. This information will be helpful
in indicating the areas where internal controls may need to be improved
and will be useful in measuring the level of risk exposure in a particular
area.
7.1.15.4 Procedure for Reporting Damage or Loss
1. If any WAPDA asset is damaged, lost or stolen then a report will be filed by
the respective DDO to the GM concerned and DG Insurance.
2. WAPDAs insurance policy will also cover any asset owned by or in the use of
an employee while the asset is being used in connection with WAPDAs
business and with WAPDAs consent. (E.g. Vehicle).
3. In case of negligence the person in whose charge the asset was at the time
the damage or loss was sustained will be responsible for paying the repair
costs.
4. Any correspondence (also third party correspondence) regarding loss or
damage will be forwarded to the respective GM and DG Insurance.
Accounting Entries:
Following accounting entries shall be passed for insurance premium:
i. When Insurance premium is accrued:
Dr. Insurance premium Relevant code
Cr. Insurance payable Relevant code
ii. When Insurance premium is paid:
Dr. Insurance payable Relevant code
Following accounting entries shall be passed for claims lodged:
iii. When asset is damaged/lost :
Dr. Asset Loss Account Relevant code
Dr. Accumulated Depreciation Relevant code
Cr. Asset Account Relevant code
i. When the claim is lodged:
Dr. WEPS Relevant code
Cr. Insurance Claims-Lodged Relevant code
ii. When Insurance amount is received:


Dr. Bank Relevant code
Cr. WEPS Relevant code
ii. When claim is settled :
Dr. Insurance Claims-Lodged Relevant code
Cr. Assets loss account Relevant code
7.1.15.5 Movement of WAPDA Equipment from one Location to Another
Location
To protect WAPDA equipment and ensure insurance coverage the following steps
shall be taken before relocating equipment from one location to another location:
i. The respective DDO under intimation to the accounting incharge concerned
will authorize the use of such equipment from one location to another
location.
ii. The equipment will be identified as WAPDA property and marked with a
special number.
iii. The security officers will require written authorization for removing
equipment from one location to another location. The staff transporting
equipment from one location to another location will present suitable
identification such as I.D. card or a written authorization from the
respective DDO or a person designated by him.
7.1.15.6 Compensation for Loss by Theft of WAPDA Owned Moveable Assets
1. Compensation for losses suffered due to theft of moveable assets shall be

paid out of WAPDAs general funds, when the following conditions are met:
i. The missing asset is listed on the departmental records (e.g. Cash
register in case of theft of cash or equipment inventory records in case
of loss of equipment).
ii. The missing equipment is marked with an identification number.
iii. There is evidence of forcible entry or forcible removal.
iv. The property is replaced with an identical or equivalent item.
2. The concerned person shall notify the administration department
regarding theft of WAPDA asset. The respective DDO will initiate
investigation and will perform all the procedures given above.
7.1.15.7 Physical Verification
1. It is the policy of WAPDA that a proper system of fixed assets control be

introduced to validate the existence, location, and custodianship of fixed
assets in order to investigate and take corrective action to resolve the
discrepancy and avoid future problems.

2. The respective GM Finance shall establish guidelines and procedures for

efficient conduct of physical verification process ensuring that the assets
are properly safeguarded and maintained.

8 CAPITAL WORK IN PROGRESS

8.1 GENERAL
1. The primary purpose of accounting for capital work in progress is to record

accurately the actual cost of work done. While for a project as a whole it may
be sufficient to ascertain the total cost for purposes of classification it is
necessary to keep separate account for each separately identification work. A
further analysis of these costs, over convenient parts of each separate work is
required for a study of comparative costs, for effective control and economy,
for comparing physical progress of construction with cost figures and for
relating such figures to estimates.
2. The Authority is mandated as per clause 8 (1) of the Act to prepare, for the
approval of the Government, a comprehensive plan for the development and
utilization of the water and power resources of Pakistan on a unified and multi-
purpose basis. In furtherance of this objective it is allowed, as per clause 10 of
the Act, to (cause studies, surveys, experiments or technical research to be
made or contribute towards the cost of any such studies, surveys, experiments
or technical research made by any other agency.
3. On the commencement of construction of a component an account will be
opened in the subsidiary ledger; and description and location of the component
as given in the approved estimate, the code number, the estimated time
required for construction, and the date on which construction starts will be
written on the ledger sheet. (Annexure-5). The approved, estimated cost and
its composition under the subheads, materials, direct salaries and wages,
contracts rental of equipment and description, and other expenses will then
the recorded. For the purpose of analysis, a contract for the supply of materials
only, or for supply of labour only, or purely for the use or rental of equipment
will be taken under the sub-heads materials, labour, or rental of equipment; as
the case may be, and not under the sub-head contracts. Expenditure is to be
analysed under the sub-head contracts only where the contract documents or
work-order places on the contractor the responsibility for the actual
construction, installation, repair, maintenance or working of a physical assets,
however large or small that asset or part of an asset may be irrespective of the
fact as to who supplies the materials for that contract.
4. The amount for which sanction has been received in the budget for the
financial year in which construction starts will then be noted on the ledger
sheet. If the construction of that particular job spreads over more than one
financial period then at the beginning of every financial period after the first,
the amount for which sanction has been received in the budget will be entered
in the space provided for the purpose.
5. Capital Work in Progress within WAPDA is either of the under mentioned
categories, depending on the nature of the expense:
i. Capital Work In progress- Feasibility Study Phase
ii. Capital Work In Progress- New Development Projects

iii. Capital Work In Progress-Additional Civil Works On Existing Hydel Power

Projects
iv. Deposit Works In Progress
8.2 CAPITAL WORKS IN PROGRESS- FEASIBILITY STUDY PHASE
8.2.1 Pre-Feasibility Stage
The Water and Power wings each has separate survey and development department
to identify probable sites for development of water related projects and power
related projects, respectively. These surveys and investigation are a continuous
process. All expenses on preliminary surveys, investigations and testing, and all
other related expenses on such surveys are separately booked and are expensed
out yearly against the power sale revenue by Power Wing and GoP current
expenditure budget by Water Wing. Separate accounts are opened in the sub-
ledgers for all ongoing surveys/sites. This account forms the basis, for development
of PC-II.
8.2.2 Feasibility Stage
Feasibility studies of the projects are carried out through preparation of PC-II and
are executed in accordance with financing arrangement stated in PC-II.
On the completion of the feasibility study and finalization of the results, the
Authority decides on the viability or otherwise of the project. The expenses
incurred on these surveys and investigations are treated in the following manner:
i. In case the proposed project is confirmed as viable and approved by the
Authority the expenses on survey etc., incurred on the particular
project are transferred to the main Capital Work in Progress (PC-I
phase) account of the project and booked under Preliminary Expenses.
ii. In case the project is not considered as feasible by the Authority for any
reason all expenses incurred on surveys and investigation on a particular
site/project shall be amortised over a period of five years.
iii. In case the Authority is approached by another agency/organisation to
obtain the feasibility report of such an abandoned project, the same is
sold out to the agency/organisation at value equivalent to the cost
incurred by WAPDA on the said study.
8.3 CAPITAL WORKS IN PROGRESS- NEW PROJECTS
8.3.1 Capital Works In Progress- New Hydel Power Projects
1. Hydel Power Development schemes, undertaken by the WAPDA Power Wing,

fall under two main categories depending on the nature of available water
sources. One is based on Dams/reservoirs where the water is taken to
turbines through tunnel. In the other case the mere flow of river water is
either taken over a specific gradient (run of river) or another case where
special channels are used to provide the flow required to run the turbines.

2. The development projects for new Hydel Power Generation fall under this
category. These projects are undertaken on the basis of approved PC-1. The
capital expenditure during the construction period of a project incurred in
line with the approved PC-1 and ADP/PSDP of the project will be recorded
in the below mentioned components:
i. Land Acquisition and settlement
ii. Operational building and Civil Works
iii. Power Generation Plant
iv. Transmission and transformation equipment
v. Tunnels, Weir, Head/Tail Race
vi. Residential and Non-residential Buildings
vii. General Plant Assets including Utility Vehicles
viii. Project Management Expenses
ix. Interest on loans during construction
x. Consultancy and Engineering Fees
xi. Preliminary Civil works
8.3.2 Capital Works In Progress- New Water Projects
1. The Schemes/Programmes which are undertaken by the WAPDA Water wing

are as under:
i. Tube well
ii. Canals/Water Distribution Works
iii. Surface Drains, Pumping Stations, Tubewell Electrification
iv. Water Reservoirs and Dams
v. Irrigation and Drainage programmes
vi. Flood Damage works
vii. Research, Investigation and monitoring and Engineering studies
2. These projects are undertaken on the basis of approved PC-1. The capital
expenditure during the construction period of a project incurred in line with
the approved PC-1 and ADP/PSDP of the project will be recorded in the
below mentioned components:
i. Land Acquisition and re-settlement
ii. Physical Assets
iii. Civil works-Camps, Colonies and Roads
iv. Dams Construction
v. Canals and other distributaries
vi. Electrical and Mechanical Works

vii. Project Management Expenses

viii. Interest on loans during construction
ix. Consultancy and Engineering Fees
x. Preliminary Civil works
8.4 PRELIMINARY CIVIL WORKS
1. The cost of temporary facilities acquired for the construction of permanent

works should be shown as a separate item in the accounts of a project.
When such temporary facilities are demolished or disposed of either during
the period of construction or on the completion of construction, the
receipts and recoveries from the disposal of such temporary facilities should
be credited to the cost of such facilities and the residual balances should be
charged to the direct cost of that particular work. On the other hand, if a
temporary facility was built or acquired for use on many works then on
disposal, the residual balance should form a part of the indirect cost to be
allocated, in an equitable manner, over the various permanent works.
2. When the cost of a temporary facility has been ascertained, the amount will
be transferred, in the General Ledger, from the account control for
construction works in progress and debited to the appropriate head of
account. In the subsidiary work in progress ledger after taking the credit
arising from the transfer, the separate account for that work will be closed,
and the relevant ledger sheets will be taken out of the subsidiary ledger and
placed on separate binder for purpose of audit and future reference and as
a permanent record of the composition of the cost of that facility.
8.5 CAPITALISATION ON COMPLETION
1. Each project will have separate code for accounting purposes. Some
physical assets are purchased for the project at the very start of the project
and are put into use from the date of purchase. These assets are:
i. Transport Vehicles
ii. Computers, Printers and other allied equipment
iii. Office equipment
iv. Arms & Ammunition
v. Furniture & Fixtures
2. The treatment of these physical assets in Water Wing projects and Power
Wing Projects differs. In case of Power Wing Projects the assets shall be
directly capitalized based on the acquisition cost of each. Depreciation will
be charged on these assets at the prevailing rates from the date of purchase
and use. Depreciation charge will be recorded as part of the Project
Management Component.
3. In case of Water Wing Projects the above mentioned assets are not
capitalized and are charged to the Capital Work in Progress account. The
reason for such a treatment is that these assets are not the property of the

WAPDA Water Wing and are transferred to the Owner/Designated

Organisation on completion of the project.
4. In the case of Water Wing projects, the completed works/projects do not
form part of the WAPDA assets. The funds received against these works are
credited to the relevant Fund Account and treated as a liability till the
completion of the project. The Capital work in progress is debited with all
expenses on the project. When the project is complete and handed over to
the concerned organisation, the Capital WIP account is adjusted against the
Funds received and the two accounts balance out.
8.6 APPORTIONMENT OF COMMON COSTS
On completion of the project, when the final costs direct and indirect have been
ascertained, the indirect charges will be apportioned over the facilities in an
equitable basis. Below mentioned types of indirect expenses shall be apportioned
to the Project Assets on the basis mentioned against each head as on the date of
completion:
i. Project Management Expenses
These expenses will be apportioned on all assets on the basis of cost of each
direct asset.
ii. Interest on loans during construction
The interest on loans during the construction period will be apportioned on
the specific direct assets for which the loan was obtained. In case of a
general loan it will be apportioned on all related direct assets equitably.
iii. Custom duties, Taxes and Insurance
Custom Duties, taxes and insurance are levied on imported items. These
will be carried separately till the completion of the project and finally
apportioned to the Electrical & Mechanical Equipment (E&M).
iv. Consultancy and Engineering Fees
These expenses are apportioned to the civil works and E&M Equipment in
equitable manner.
8.7 COMPLETION OF PROJECT
8.7.1 Final Bills from Contractor
On completion of the project the Contractor will submit along with his final bill
and other relevant documents, a Completion Certificate indicating that the
project/Job has been completed in accordance with the Agreement of award of the
Job/Work.
8.7.2 Final Certificate by PD
1. The Project Director shall process the case and issue the Defects Liability,
Taking Over Certificate and a Final Completion Certificate in accordance
with the terms of the agreement/contract of particular project.

2. The Project Director shall convey the total liability as on the date of
completion of the project, within two months of the issue of TOC, to the
Budget and Accounts Officer.
3. On the completion of construction of a component, the Budget and
Accounts Officer will satisfy himself that all liabilities in respect of that job
have either been paid or provided for and that all credits relating to that
job have been taken into account. If for any reason, liability in respect of
work done or materials supplied remains unpaid and un-provided for, he will
estimate such liability on the basis of the information contained in the
relevant contract or tender document or work-order, and debit the amount
to the job. Conversely, where he finds that, in terms of the contract or
tender document or work-order, a claim is to be made on the contractor or
the suppliers, he will make a reasonable estimate of such a claim, and
credit the amount to the job account in consultation with the DDO/PD.
After making the provision, if any, he will close the separate account for
that component, and transfer the cost to the subsidiary ledger account for
the work of which that component forms a part.
4. When the construction of all components of a work is completed, and the
cost transferred to the subsidiary ledger account for the work, this account
will show the total direct cost of the work without taking into consideration
the indirect cost of administration and consultancy.
5. Once the project is complete, the concerned accounting head under the
DDO/PD shall prepare the Journal Voucher based on the final determined
costs (i.e., after appropriation of Management Expenses) for transfer of the
project from the WIP to Asset account. Also included in the information to
be provided by the DDO/PD, will be entries for the Fixed Assets Register,
the cost allocation sheet and other information.
6. The concerned GMF shall review and vet the final transfer documents
before affecting final transfer and recording in the books of accounts. In
case of transfer of completed projects from one wing to another the same
shall be approved by the concerned Members.
7. The projects undertaken and completed on behalf of outside agencies shall
be transferred to the awarding Agency as per the terms of agreement.
8.8 CAPITAL WORK IN PROGRESS-ADDITIONAL CIVIL WORKS ON EXISTING

HYDEL POWER PROJECTS
1. The additional civil works like new residential houses or construction of

school or hospital fall under this category. Depending on the size and nature
of the works these may also be spread over more than a year. These works
are normally funded from internal resources of WAPDA.
2. In all type of projects all expenditure on works under construction will be
debited to a Construction Work-in-Progress Account which will be a control
account in the General Ledger. The record of expenditure on every work
and on each of the components thereof will be maintained in subsidiary
ledger which will have a separate account for the work and for each of the
components. The separate account will give the description and location of

the work or the component, code number, estimated construction time,

dates of commencement and completion of the work or the component
estimated cost and the budget sanctions for the different periods over
which construction is spread; and will have columns for Date, Particulars,
Folio, Total: Debit/Credit, Analysis of Expenditure (Materials, Direct
Salaries and Wages, Contracts, Rental of Equipment and Depreciation,
Other Expenses), and Material( Description and Quantity).
3. The amount for which sanction has been received in the budget for the
financial year in which construction starts will then be noted on the ledger
sheet. If the construction of that particular job spreads over more than one
financial period then at the beginning of every financial period after the
first, the amount for which sanction has been received in the budget will be
entered in the space provided for the purpose.
4. A breakdown into convenient parts or components will, however depend on
the nature of work, or the agency through which the work is to be
executed, and on the terms of the contract, if any. For a work constructed
departmentally i.e. through the Authoritys own task forces, the breakdown
will be in components of smaller size than may be necessary in a case where
the work is to be done by a contractor on a turn-key basis.
8.9 DEPOSIT WORKS IN PROGRESS FOR WAPDA FORMATIONS
1. The deposit work in progress within WAPDA relate to specific work/project

undertaken by one wing for another and when completed transferred to the
formation on whose account it has been carried out. The formation to whom
task has been assigned will submit cost estimates to the job assigning
formation to provide funds as per given time lines. The formation
undertaking the task will keep the advance amount received in a separate
liability account and record expenses of the related job in a separate
deposit work account. The Deposit work in progress when completed is
transferred to the related formation on whose account it has been carried
out and the net result is profit margin charged to the related formation as
services charges of the work carrying out formation..
2. Departmental charges in respect of works performed by one formation on
behalf of another should not be levied on inter-wing works because various
projects of WAPDA whether belonging to Water Wing or Power Wing do not
constitute separate Departments/Organisation for purpose of accounting.
However, to work out the correct cost of work done by one formation on
behalf of another, care should be taken to ensure that various components
of the cost, including pay charge of the staff whose time is booked against
the work and hire charges of the machinery deployed according to the
machine hours devoted are duly included as direct cost, while analyzing the
total cost of the job.

1.
9 RECEIVEABLE, ADVANCES & DEPOSITS

9.1 RECEIVABLE MANAGEMENT
The objective of the policy is to prescribe guidelines on accounting, reporting,

recording, collecting, and writing off accounts receivable, to be used for improving
the management over receivable owed to WAPDA.
The GM Finance (Co-ordination)/DGF (Co-ordination) shall be responsible for:

i. Prescribing accounts receivable policies, procedures, and guidelines.
ii. Providing technical assistance to WAPDA regarding the accounting for
receivables.
iii. Monitoring and analyzing the receivables of WAPDA.
iv. Developing systems that are adequate to properly account for and report
their receivables.
v. Reporting receivables, their age, collection status and funding source.
The DDO shall be reportable to the relevant GM Finance for ensuring
implementation of policy and procedures regarding WAPDA receivables.
9.1.2 General Instructions
Receivable master records and billing codes shall be maintained by the relevant
Budget & Accounts Department and access to those records shall be granted to only
those employees who need it for performing their assigned tasks.
To assure proper and accurate billing, the employees shall make it certain that the
charges billed are proper, clearly and correctly computed and stated, and charged
against receivable to which they relate.
9.1.3 Internal Control
To promote the accuracy of WAPDAs accounts receivable records and to

discourage fraudulent manipulation of the accounting records, the B&AO shall
incorporate the following internal control measures for accounts receivable:
i. Aging information shall be collected, maintained, reported, and acted upon
in a standardized and consistent manner and a review of past due accounts
shall be performed periodically.
ii. The cashier will not handle cases of disputed dues.
iii. A reconciliation of individual account balances to the control balance shall
be performed periodically.
iv. Invoices shall be pre-numbered and all numbers accounted for periodically.
v. An appropriate employee who does not handle cash receipts shall approve
payment of credit balances and credit adjustments to the account balance.

vi. A diligent effort shall be made to collect all outstanding accounts in

general, invoices shall be collected as expeditiously as possible, but the
cost of collection shall not be allowed to exceed the expected revenue.
Accounting data gathering systems shall recognize and preclude situations in
which collection effort and potential benefits become imbalanced.
vii. Regular recovery notices shall be sent to all account receivables.
viii. Where possible, the duties of the accounts receivable bookkeeper and the
cashier shall be separated.
ix. Accounts receivable write offs shall be recorded by an employee who does
not handle cash receipts.
x. Routine collection procedures shall be documented in writing.
9.1.4 Accounting for Receivables Written Off
1. Uncollectible accounts may be written off in WAPDAs financial accounting

records and no longer recognized as collectible receivables for financial
reporting purposes.
2. Writing off an accounts receivable is sensitive and shall therefore be subject to
strong internal accounting controls. All write-offs of uncollectible accounts
receivable shall require the approval of Authority.
3. A debt shall be considered to be uncollectible when it meets one of the
following criteria:
i. All reasonable collection efforts have been exhausted.
ii. The cost of further collection action shall exceed the amount recovered.
iii. The debt is legally without merit or cannot be substantiated by evidence.
iv. The debtor cannot be located.
v. The debt was discharged in bankruptcy.
vi. The debt has been compromised, in the best interests of WAPDA.
vii. No audit para/litigation or court case is pending against receivables.
9.1.5 Aging of Accounts Receivable
When using an aging of accounts receivable, individual receivable account balances

are categorized according to the length of time they have been outstanding.
The management estimates the relative uncollectible part for each category based
on past experience. The estimated uncollectible amounts in each category are
totaled to determine the total allowance.
9.1.6 Reconciliation and Review
Aged listing of individual receivable balances shall be prepared on monthly basis

and shall reflect the results of billing and collection follow-up activity. The
respective GM Finance shall review old balances.

9.1.7 Division of Responsibility
The following tasks should be segregated/handled by different persons as a prudent

internal control:
i. Establishment/Allowing credit facility.
ii. Recording of charges against credit lines.
iii. Recording of cash collections from debtors.
The respective Account Head/DDO shall approve the transactions before these are
entered in the computer system. The respective GM Finance shall review the
operations. The Accounts Staff shall enter approved transactions / data into the
computer system.
A memorandum record of balances written off as uncollectible shall be maintained.
All transactions, whether manual or automated, shall have the Authoritys
approval.
A clear distinction shall be made between cancelling accounts receivable and
writing off accounts receivable. Accounts receivable can be cancelled or adjusted
when WAPDA is not entitled to collect the money. Accounts receivable shall not be
cancelled to avoid write off procedures.
9.1.8 Minimum Prescribed Information
WAPDA shall obtain the following minimum prescribed information on debtors:

i. Full name of the Firm/ Company/ Contractor, and any previous name(s) if
applicable.
ii. Full address of the Firm/ Company/ Contractor along with complete
address.
iii. Full address of the Firm/ Company/ Contractor along with complete
Telephone numbers, Fax numbers.
iv. Copy of registration certificate.
v. Copy of National Tax Numbers and Sales Tax Numbers.
vi. Copy of Computerized National Identity Card Number.
Accounting Entries:
When income is accrued:
Dr. Accounts Receivable Relevant code
Cr. Deferred Income Relevant code
When payment is received:
Dr. Cash/Bank Relevant code
Cr. Accounts Receivable Relevant code

When income is recognized:

Dr. Deferred Income Relevant code
Cr. Income Relevant code
9.2 ADVANCES
9.2.1 Scope
This policy shall cover all types of advances made to employees for specific
purposes and deposits made by WAPDA. Employees with any type of cash handling
function shall be required to be familiar with the requirements of this policy.
The GM Finance of each wing shall be responsible for the enforcement of

procedures governing the cash management, maintenance of the records,
appropriate usage, accounting for advances and deposits and performing periodic
reviews of procedures being followed.
9.2.3 Basic Procedure and Guidelines
1. Requests for temporary advances shall be submitted by the person seeking

advance on the Temporary Advance Request Form. The following
information shall be provided:
i. The amount requested.
ii. Purpose of the advance.
iii. Name of the individual who shall be using the advance.
iv. Length of time the advance shall be needed.
v. Signatures of the Account Head and the DDO/PD concerned.
2. The advances shall be issued for WAPDA related business activities.
3. All advances shall be initially charged to WAPDA receivable account.
4. The individual receiving the advance shall personally be liable for any loss
of a cash advance.
5. Unused advances shall be returned to WAPDA immediately after the activity
completion.
6. Advances for approved purchases shall be given to authorized personnel,
accounting of which shall be completed within two weeks.
7. In case the actual amount spent is excess, it will be reimbursed subject to
approval of the DDO.

9.2.4 Travel Advances
1. Cash advances for travelling, upto a maximum of 80%, of the estimated

cost, shall be given for the approved journey.
2. Travel can be for any number of days without return to employee's site or
WAPDA location during those days.
3. All travel advances must be approved by the employees concerned DDO.
4. The employee will submit TA adjustment account as early as possible after
performing journey but not later than six months of advance in which case
the amount shall be adjusted from his salary.
5. All unutilized cash advances shall be repaid in full within 15 calendar days
following completion of the trip. Failure to repay a cash advance within this
period shall result in the amount being deducted from payroll earnings.
6. WAPDA shall retain the right to deny travel advances to any individual who
has not submitted documentation in a timely manner for a previous
advance.
9.2.5 Monitoring Advances
Employees taking advance shall complete the employee expense worksheet to

document their expenses within 15 days of the scheduled advance end date.
Employee shall sign the worksheet. Receipts and other support documentation shall
be attached to this worksheet and submitted to the respective immediate head of
accounting unit for processing.
To ensure proper monitoring of a cash advance, the monitor shall:
i. Process an expense report in the financial system using the information
supplied on the employee expense worksheet and receipts.
ii. Verify that the expenses meet WAPDA policy.
iii. Attach all original-supporting documents for itemized expenditures, number
the documents.
iv. Check the total of amounts on the itemized expenditures to ensure these
agree with the total posted on the Temporary Advance Request Form.
v. Indicate the balance remaining on the original Advance after taking into
account the previous expenses on the Advance line.
vi. Complete required coloums of the form and submit to approver.
vii. Print expense report, attach worksheet, receipts etc., and forward to
approver.
9.2.6 Miscellaneous Advances
Advances may be requested to cover anticipated cash expenditures to be incurred

on behalf of WAPDA for a sponsored event, prior to the event taking place.
Advances made to outside parties like advances made to building contractors shall
be adjusted against the running bills as per the terms and conditions of the

agreement/contract. For events that require cash payments such as freight

charges, meal charges on trips, etc., departments shall submit requests for
advances in writing on the Cash Advance Request Form to the Accounts and Finance
Department. Each request shall provide an explanation of the need for the cash
advance.
The following steps shall be followed:
i. When cash payments are required as a consequence of contractual
arrangements, a copy of the contract shall be presented with the request
for an advance.
ii. Departments delaying return of advances shall not be allowed further
advances without either the clearing of those in question or the approval of
the respective DDO.
iii. When the need for the advance is complete, the department shall return
the unused cash, to the Accounts and Finance Department.
iv. All receipts shall be verified on advances being cleared. Any questionable
receipts shall be referred to the Budget and Account Officer.
v. The expenditures must conform to the approved budget categories, and the
expenditures must not result in excess costs beyond flexibility limits of the
budget categories.
9.2.7 Review
The Accounting unit shall prepare monthly summary and detailed reports by
formations of outstanding cash advances. These reports shall be sent to the
respective GM Finance for review and any necessary action on outstanding cash
advances and amount expensed against original Cash Advance Request.
Accounting Entries:
1. When payment is made:
Dr. Advances Relevant code
Cr. Cash/Bank Relevant code
2. When advance is adjusted:
Dr. Relevant head Relevant code
Cr. Advances Relevant code
9.3 DEPOSITS
1. WAPDA deposits shall be made in guidance of the directions issued by the

Authority that shall best describe the way consistent with the carefully
crafted strategies designed for the accomplishment of the strategic
financial management.

2. The deposits shall be made only if they are in line with the terms of
agreement and/or for valid purposes.
3. The approving authority for making deposits shall be WAPDA Authority or
powers vested to the respective GM Finance by WAPDA Authority. Before
approving, the respective GM Finance shall assure that deposit is being
made keeping in view the considerations of the relevant agreement or in
accordance with the issued guidelines.
4. The respective GM Finance shall be responsible for the management
including the accounting and maintenance of records etc., and vital
administration of matters with the oversight of the respective GM Finance
who shall assist him in carrying out the duties, and shall oversee the whole
process of deposit management.
Accounting Entries:
1 When payment is made:
Dr. Deposit Relevant code
Cr. Cash/Bank Relevant code
2. When payment is received:
Dr. Cash/Bank Relevant code
Cr. Deposit Relevant code

10 TRADE DEBTORS
10.1 GENERAL
The business of power generation and sale is regulated by NEPRA which has granted
a generation licence to WAPDA. WAPDA identifies this business as Hydroelectric-
NEPRA Regulated Business. The accounting for Hydroelectric-NEPRA Regulated
Business is carried out in conformation with the NEPRA (uniform system of
accounts) Rules 2009.
The electricity generated by WAPDA is sold directly to the National Transmission
and Despatch Company Limited under a Power Purchase Agreement (PPA) dated
March 1, 1999, as amended on January 24, 2011. The PPA provides for procedures
and timings for taking measurements of the electricity passed on to NTDC at the
agreed transfer points and the measurement and billing procedures, the raising of
invoices for electricity and other charges.
The invoices are raised to NTDC on monthly basis and are payable within 25 days
from the date of invoice.
10.2 PROVISION FOR DOUBTFUL DEBTS
Management shall establish an allowance for doubtful debts to reflect the amount
that is estimated as uncollectible. The establishment of an allowance on regular
basis ensures that WAPDAs receivables are not overstated for financial reporting
purposes.
10.3 WRITE OFF OF UNCOLLECTIBLE ACCOUNTS
Trade debts shall be written off when all collection procedures have been
conducted without result and management considers the balances as bad and
uncollectible. All write-offs of uncollectible accounts shall require the approval of
Authority.
10.4 CORRECTION OF ERRORS
When an error has been made in an original invoice or it becomes necessary to

adjust a receivable account, the error shall be corrected upon the approval of the
competent authority and a record shall be maintained indicating the nature and
amount of the adjustment that has been made to a receivable account.
10.5 AGING OF TRADE DEBTORS
Aged listing of receivable balances on the basis of invoices raised and collections
received shall be matched on monthly basis. The amounts shall be categorized in
terms of outstanding since say one month, three months, six months and so on. The
GM Finance (Power) shall review old balances.
ACCOUNTING ENTRIES

The respective Account Head/DDO shall approve all transactions before these are
entered in the computer system. The respective GM Finance shall review the
operations. The Accounts Staff shall enter approved transactions / data into the
computer system.
The following entries shall be made for recording of Trade Debtors:
1. On raising of invoice for sale of electricity
Dr. Trade Debtors-NTDC Relevant code
Cr. Sales of Electricity Relevant code
2. When payment is received:
Cr. Trade Debtors-NTDC Relevant code
3. When adjustment is made on account of any reason:
Dr. Sales of Electricity Relevant code
4. When a provision for doubtful debts is made:
Dr. Doubtful debts Relevant code
Cr. Provision for Doubtful debts Relevant code
The entry would be reversed in case of any reversal/adjustment of the
provision.
5. When a debt is written of:
Dr. Bad debt written-off Relevant code

11 STORES & STOCKS INVETORY

11.1 STORES INVENTORIES
The objective of the policy is to provide guidance and direction in relation to the
management of inventories and to ensure that recorded inventory is accurate and
maintained properly. WAPDA has computerized the inventory recording process and
the same has been deployed at all accounting units.
Following kinds of material shall be routed through store of respective operation &
maintenance formations:
i. Maintenance material
ii. Spare parts
iii. Tools & Plants
iv. Plant fuel, Oil, lubricants & Chemicals
v. Scrap material
The capital assets like plant & machinery, equipment, vehicles, computers and
furniture & fixture etc. received, are recorded in the fixed asset register and not
routed through the store. Similarly the POL of transport vehicles is monitored
through vehicle log book and receipt and consumption of the same is not routed
through the store. Also office supplies including stationery etc., shall not be routed
through stores. All other material (petty or bulk) purchased including POL for
operational vehicles i.e. tractor, truck, dumper, fork lifter etc., is to be routed
through the store.
11.2 STOCK CODING
1. The Hydel power stations have plants and machines of different make and
brand names installed from time to time therefore, spare parts of related
plants, machinery and equipment need to be grouped differently for their
easy identification in the store. The office of GM Hydel operation Lahore will
be responsible to develop and maintain the unique group level and main
control level stock codes to keep uniformity in stock coding throughout
WAPDA Hydroelectric formations. The designated Store Officer of the
respective Hydroelectric formation will be responsible to develop a unique
stock code to sub control and subsidiary stock level within the logical
sequence of group and main control level stock codes developed by the office
of GM Hydel operation.
2. The subsidiary stock codes for local as well as foreign material purchases will
be allotted by the respective purchase office in consultation of Maintenance
Engineer at the time of placing of purchase order and the same will also be
indicated in the purchase order against each material item ordered to be
purchased to facilitate identification thereof at the time of receipt of said
material in store. On supply of ordered material, the Purchase section will
write the stock code on SMB against each received item by referring the one
mentioned in the purchase order. While indenting the material for

withdrawal/issue, the Maintenance Engineer will initiate MRS by indicating

the stock code as has been shown in the purchase order. The respective Store
Keeper and Value Ledger Keeper (Accounts Assistant) will post the receipt or
withdrawal in the respective individual stock code as has been indicated in
the SMB or MRS basing from purchase order. When the material of same
nomenclature, size and design is replenished afterwards through further
purchases, the same will be indicated in the subsequent purchase orders. The
designated Purchase Officer will ensure that no duplicate stock code is
allotted to a single particular type of material even though being consumed
by different maintenance sections. If designated Purchase Officer feels that
some new purchase item does not logically fit in the existing main control
level code, he will propose new main control level code to the office of GM
Hydel Operation Lahore, which will examine the same and notify to all Hydel
power stations after the approval of GM Hydel operation.
11.3 STOCK CODES
A 10 digit stock code shall form the basis for the recording, organizing and
reporting of financial information relating to value of store inventory. These
elements shall appear on the various reports and forms generated in the respective
accounting unit. The code shall cover the following identification levels:
i. Group level (first 2 digits)
ii. Control level (next 1 digit)
iii. Sub control level (next 3 digits)
iv. Subsidiary account level (next 4 digits)
11.3.1 Group Level
Group level stock codes shall be of two digits and shall describe the transaction
affecting the broader category of following store stocks:
05 Consumable material
10 Spare parts
25 Loose Tools
30 Tools & Plants
35 Scrap material
11.3.2 Control Level
Each group level has different control levels falling in the logical nature of said
category of material. The example of control level codes of spare parts will be as
under:
10-1 Electrical spare parts
10-2 Mechanical spare parts
10-3 P&I spare parts

10-4 C&I spare parts

10-5 Switch yard spare parts
10-6 General spare parts
11.3.3 Sub Control Level
The store/ procurement section of each hydroelectric formation will be responsible

to develop sub control level stock code in next 3 digits within the ambit of control
level developed by the office of GM Hydel operation. Following are some of the
examples of sub Control level codes of control level stock code of 10-1 of Hydel
power station Tarbela.
10-1001 Control Panel
10-1002 Generator fiber cards
10-1003 Generator stator core
11.3.4 Subsidiary Account Level
The subsidiary account level code will be of 4 digits to be developed by the Store/
Purchase Officer of the respective hydroelectric formation. Following are some of
the examples of subsidiary accounts level codes of sub control level stock code of
10-1001 of Hydel power station Tarbela.
10-1001-0001 G-fire control panel c/module KE-6351-136A
10-1001-0002 G-fire control panel c/module KE-6351-136B
10-1001-0003 G-fire control panel c/module KE-6351-136C
10-1001-0004 G-fire control panel module MG-6351-124
10-1001-0005 G-fire control panel mount moduleNB-6351-102
Following store functions will be supervised by different persons and may not be
done by a single person.
i. Store Procurement
ii. Store Keeping
iii. Store Accounting.
11.4 STORE PROCUREMENT
The procurement of stores involves the following steps before the items/goods
reach the stores.
i. Tendering, approvals and issuing of Purchase Orders
ii. Inspection of material
iii. Recording Store Measurement Book (SMB)
iv. Issuing Goods Receipt Note (GRN) (Annexure-6).

v. Periodic Physical verification of Store
11.5 STORE KEEPING
Once the items/goods reach the stores the task of the store incharge revolves
around the following:
i. Maintain Stock Receipt (GRN) Register (Annexure-7)
ii. Maintain Stock Measurement Book Register (Annexure-8)
iii. Maintain Store issue (MRS) Register (Annexure-9)
iv. Maintain Stock Register (Annexure-10)
v. Handling of stocked material by updating bin cards (Annexure-11) and
tagging, safe custody and protecting from environmental affect.
vi. Prepare monthly store receipt, issue and closing stock reports.
11.6 STORE ACCOUNTING
The Accounts section will perform below mentioned activities through the use of
store inventory module:
i. Maintain Store Value Ledger of each individual item of material on the
format at Annexure-12.
ii. Pricing of Material Requisition Slip (MRS) (Annexure-13)
iii. Issuing monthly closing stock value report
iv. Preparing Ledger Posting Summary (LPS) for General Ledger:
On receipt of stores:
Dr. Main Control Relevant code
Cr. Supplier-wise report Relevant code
On issue of stores:
Dr. R&M expense head of a/c report Relevant code
Cr. Main control level report Relevant code
11.7 ACCOUNTING/PRICING OF MATERIAL PURCHASED/ACQUIRED
11.7.1 Local Purchases Through Tender / Quotation.
1. The Procurement Section will receive material in accordance with delivery

challan provided by the Supplier.
2. Procurement section will record inspection certificate on the back of
delivery challan.

3. Procurement Section will record SMB (Annexure-14) basing upon GST /

commercial invoice provided by the supplier and inspection certificate.
11.7.2 Purchase Through Purchase Committee or Petty Advances
Procurement Section will record SMB basing upon GST/ commercial Invoice issued
by the vendor.
11.7.3 Material Indented from other WAPDA Formations
Procurement Section will record SMB basing upon material Indent (Annexure-15)
duly filled and priced material supplying formation.
11.7.4 Foreign Material Purchase
1. On receipt of Interim adjustment Accounts from CRRK as per Annexure-16 ,

the procurement section of Hydel Power Station/Project will carry out
inspection and issue Goods Receipt Note (GRN) to CRRK immediately. For
doing material pricing, procurement section will work out currency
conversion factor by dividing total actual/provisional payments including
duties, transportation and other charges but excluding sales tax, with total
invoiced amount in foreign currency.
2. The procurement section will write the description of material, measuring
unit, quantity, unit rate (in foreign currency) on the Store Measurement
Book (SMB) truly as has been written in the suppliers invoice. The Currency
Conversion Factor rounding in four decimals will be written against unit rate
of each material item in foreign currency. The unit rate in foreign currency
will then be multiplied with currency conversion factor to work out unit
rate in Pak Rupees. After that the quantity of material item will be
multiplied to the unit rate in Pak Rupees to work out value of the material
in Pak Rupees as usual. The duties, Taxes and other charges will be
allocated to the amount of each class of article in proportion of their
composition in the total converted amount of invoice in the Pak Rupees.
The sales tax will be claimed as input tax through monthly GST Return
however, will be added to the total value of the material at the bottom to
tally the total actual/provisional cost of the material incurred by CRRK. The
format of SMB of foreign material is at Annexure-16 The stock code as has
been indicated in the Purchase Order will be shown in SMB against each
item purchased.
11.8 PRICING OF STORE RETURNED BY MAINTENANCE SECTIONS.
Maintenance sections will keep material at site only for immediate usages for the
ongoing specific jobs and must return the following nature of material to Store
section at month end through Store Return Warrant (SRW) (Annexure-17) and
maintain Store Return Warrant Register (Annexure-18) for recording all such
returns.
i. un-used ( not needed now to be used in future )
ii. Defective / damaged (to be used after repair).

iii. Scrap for disposal.
11.8.1 Un-Used Material
Procurement section will price the SRW for un-used material at the unit rate
applied to Material Requisition Slip (MRS) against which said material was initially
drawn from the Store.
11.8.2 Defective/ Damaged Material
In case material drawn from store and trialed at work place is found damaged
during installation and requires reshaping to make it usable, it must be sent to
workshop through SRW. The Procurement section will price SRW at the unit rate
applied to MRS against which said material was initially drawn from the Store. Such
damaged material will be shown as material at site on General Ledger (GL) and not
as regular/ unused material. Workshop in-charge will place Work order for its
repair/treatment and after completion of work, intimate to the concerned section
for its job completion. Repair cost of said work will be charged directly to the
plant maintenance expenses. Concerned maintenance section will prepare a
material consumption sheet in duplicate and get it signed by ARE/ RE(M). A copy of
said consumption sheet will be sent to accounts section to charge the maintenance
expense account by deleting the cost of material from material at site accounts in
the month the material is actually used.
11.8.3 Scrap for Disposal.
The Scrap for disposal returned by maintenance sections may include the following:
i. Wood/Packing material.
ii. Plastic (Bottle, drum, Cans).
iii. Steel-I (Strips, Bar, Nuts, Bolts).
iv. Steel-II (irreparable parts, T&P, & machines.
v. Steel-III ( Drum, Bottle, Canes)
vi. Copper (damaged wires, strips Nut & Bolts).
vii. Aluminum (damaged wire strips etc).
viii. Rubber (Tyre, tube & batteries).
ix. Others
Scrap for disposal will be priced at a notional price which will be @ 25% of last
auction rate of said category of scrap and credited to the deferred income.
Scrap for disposal will be shown in the GL at notional price and any difference
between actual disposal value and token price will be credited to the Misc. Income
account at the time of disposal by adjusting it with deferred income balance on
this account.

11.9 RECORDING OF INVENTORY
1. The Procurement section will attach 1st copy of SMB page with the
commercial invoice and process the same for making payment by the
Accounts section.
2. The Procurement Section will send 2nd copy of relevant SMB page(s) for each
purchase order immediately to the Accounts section along with GST invoice
for posting in the Stock Value Ledger and compiling GST input claim of the
formation.
3. The Procurement section will send 3rd copy of relevant of SMB page(s) for
each purchase order simultaneously to Store section for posting of receipt
of material in the Stock Register along with following documents for their
record.
i. Purchase Order.
ii. Invoice.
iii. Bill of entry.
iv. Inspection Certificate.
4. Based upon 4th copy of SMB pages, the Procurement Section will prepare list
of all the SMBs recorded during the month and send to the Accounts section
and Store section. The Accounts section will cross examine the said details
of material receipts by comparing the same from the similar report
generated from Store Inventory Module.
11.10 ISSUE OF MATERIAL FROM STORE.
11.10.1 Issue of Consumable Material
The process of withdrawal of material from store by the maintenance sections will
be followed as under:
i. The Foreman of concerned Maintenance section will initiate withdrawal of
Store items of recurring/consumable nature from store on weekly estimate
basis through Material Requisition Slip (MRS).
ii. The in-charge of requisitioning Maintenance section will endorse the
material requisition.
iii. The store officer will confirm the availability of the material in stock.
iv. The authorized officer will approve the issue of material to the
maintenance section keeping in view the availability in stock and need for
consumption.
v. The Value Ledger Keeper (VLK)/Accounts Assistant will price the MRS at
moving average rate of the material item requisitioned by operating Store
Inventory Module.
vi. Store section will then issue the material to the Foreman of maintenance
section.

vii. The Store Keeper and VLK/Accounts Assistant will make posting in their
Ledgers immediately on issue of material from the store.
viii. The Forman will retain 1st copy of the MRS, 2nd copy will be retained by
Store Keeper and 3rd copy will remain with VLK/Accounts Assistant.
The withdrawl of store through chits may be allowed only in emergency in off-
timings. However, the respective store keeper will get signature of the Foreman on
emergency chit Register while issuing the material on chit. The Foreman will
record the material drawn on chit in the site register to have a track of
consumption of material in emergency. The concerned maintenance section will
invariably provide MRS of that withdrawn material to the store section on next
working day by fulfilling the above laid down formalities. The store will mention
the MRS number in the chit register against the material issued on chit previously.
11.10.2 Issue of Spare Parts
The maintenance section will withdraw spare parts through MRS for immediate
replacement and not for stock purpose at site. Proper record for parts replacement
will be maintained at the site for T&P in use.
11.10.3 Issue of T&P
All new T&P purchased will first be taken on stock by the Store Section. The
Foreman will withdraw new T&P items from Store through MRS on need basis and
maintain a T&P register at site.
11.10.4 Issue of Store to other WAPDA Formations.
The authorized officer may approve issue of material from the Store to other
WAPDA formations against indent keeping in view the stock requirement of the
formation. Material will be priced at moving average value ledger rate and no store
handling charges will be added.
11.10.5 Issue of Scrap for Disposal.
1. In order to dispose-off the Scrap, survey report (Annexure-19) will be

prepared as per prescribed disposal procedure. Survey Committee will
determine the reserve price of each item to arrange Auction.
2. After completion of Auction process, Invoice for sale of scrap material will
be issued to the bidder at the rates approved by adding GST if applicable.
3. The issue of scrap from store will be priced at the notional rate which was
applied on receipt of said material in store. While posting the issue voucher
of Scrap material in the Store Inventory Module, the notional value of said
material will be debited to the deferred income account.
4. On receipt of sale proceeds in bank, Accounts section will credit the Misc
income account.

11.10.6 Issued Material Account
Based upon 4th copy of the MRS, the Store Officer will prepare list of MRS against
which material has been issued to the maintenance sections during the month and
send to the Accounts section for making posting in the General Ledger. Similarly
the respective store office will also render account of issue of T&P, spare parts,
Scrap material on disposal and material to other WAPDA formations, to the
Accounts section at the end of each month. The Accounts section will cross
examine the said details of material issued by comparing the same from the similar
reports generated from Store Inventory Module.
11.11 PHYSICAL VERIFICATION OF STORE INVENTORY
1. The Procurement section and Accounts section will jointly carry out physical
verification of the store items by classifying the material in the following
categories under ABC plan:
i. The stock item having unit price of Rs 50,001 and above will be
physically verified 100% in the month of June of each financial year as
first preference,
ii. The stock item having unit price of Rs 5,000 to Rs 50,000 will be
physically verified 100% in 2nd preference in June of each financial year,
iii. In 3rd preference the store items having unit price less than Rs 5,000 will
be physically verified at random basis during January to May of each
financial year.
2. The difference identified by the physical verification committee must be
investigated by the authorized officer and adjustment (recovery or write-
off) must be made at the end of financial year with the approval of
competent authority as per WAPDA Rules and Procedures. Stock verification
format is at (Annexure-20).
11.12 FUNDING, PRICING AND ACCOUNTING OF FOREIGN PURCHASED MATERIAL
The procedure to regulate funding, pricing and accounting of Foreign Purchased

Material at the office of CRRK will be as follows:
i. The concerned Chief / Resident Engineer and Project Director will issue the
purchase order and simultaneously purchase office will allot Unique Code to
each item. The procurement department while issuing purchase order will
also obtain approval of competent authority on an office note for pre-
payment of Rs. 10,000/- to CRRK on the basis of which, B & A O of that
office will issue crossed cheque, out of Imprest fund. The B & A O of the
concerned accounting unit will record this advance under sub control level
account code 22 described as Prepayment foreign material CRRK , against
the particular purchase order.
ii. On receipt of PO and cheque of Rs. 10,000 CRRK the Budget & Accounts
Officer (B & A.O.) of CRRK will credit the amount in Consignment Credits
group level code 42. CRRK will open Letter of Credit (L/C) in favour of
supplier and allot a file number to the said purchase order. CRRK will record

L/C opening charges and other expenses in the Consignment prepayment

account group level 23, for the PO relating to the related
consignee/formation.
iii. Immediately after opening the L/C, the B & A.O. (CRRK) will prepare
estimates for 100% payments to be made for that particular purchase order
and raise demands for supply of funds to the respective consignee indicating
the tentative date of shipment and custom clearance thereof. Where L/C is
opened by the concerned formation, the B&AO CRRK will raise demands for
funds covering custom duties, taxes and for other charges, to the concerned
formation.
iv. On receipt of such estimates from CRRK, the concerned consignee will raise
demands for funds immediately to the relevant General Manager Finance
through General Manager of executive side, clearly specifying the due date
of demand (i.e. one month before the tentative date of shipment
arrival).The General Manager Finance concerned will ensure that funds to
CRRK are released on due date and will raise Debit Advice to concerned
formation after releasing the funds.
v. On receipt of Debit Advice, the B&AO of concerned formation / Project will
debit the Account Pre-payment foreign material-CRRK, whereas on
receipt of funds, the CRRK will credit the concerned formation/Project
against particular Purchase Order in Account Consignment Credits.
vi. The Incharge of Accounts section o/o CRRK will make payments for foreign
purchases by debiting the concerned purchase order in its books of account
under code Consignment pre-payments concurrently.
vii. On receipt of monthly report from the Custom Clearance Agent for the
shipments cleared and transported, the Incharge Account section of CRRK
will pay all pending bills related to shipment and record accruals for the
outstanding claims to be received pertaining to the shipment.
viii. CRRK will make arrangements for the inland shipping of the goods to the
formation.
ix. The Incharge of Accounts section will prepare and submit an interim funds
disbursement account to the consignee up to 10th of the following month
showing expense details supported with relevant documents i.e. invoices /
paid vouchers etc. and will prepare a Journal Voucher (JV) to transfer the
incurred /accrued cost of the particular shipment from Consignment
Prepayment account code 23 to Consignment Credit account code 42 of the
related consignee.
x. On receipt of Shipment adjustment account from CRRK, the accounts
section of the consignee will record the same by preparing a JV debiting the
material transit account and crediting to the Prepayment Foreign Purchases
Account 42 and pass on the adjustment account to the purchase officer for
preparing valuation sheet.
xi. Consignees purchase office will write foreign material SMB and the
Accounts Section of concerned formation/Project will post the SMB by
debiting Store Control Account in General Ledger as well as make posting in

the value ledger against each particular stock item by crediting the
Material in Transit Account under group level account 14.
xii. On receipt of GRN from the consignee, the Incharge of Accounts section
(CRRK) will make payment of outstanding claims (Accrued) and submit the
final Adjustment Account immediately after making 100% payments for
particular purchase order. If actual payments for the consignment are more
than the advance amount received on estimated basis, accounts section
CRRK will ask the consignee formation to pay through bank cheque the
difference and if the actual payment is less than advance amount he will
remit back the unspent balance amount through crossed bank cheque of the
advance funds received for consignment clearance.
xiii. The B & A.O. of the concerned formation/project will credit the
Prepayment Foreign Purchase on receipts of cheque for unspent balance.
If the actual paid amount by CRRK is more than the estimated amount
already paid in advance the difference will be paid to CRRK through bank
cheque and the difference amount is charged directly to related Repair and
Maintenance expense account.
xiv. The B & AO of the Consignee office will maintain PO Wise Consignment A/C
with CRRK in subsidiary level last 4 digits accounts head and reconcile the
outstanding balance with CRRK at each quarter end. The respective P.O.
advance account will be closed with zero balance on receipt of final
adjustment account from CRRK.

12 TREASURY MANAGEMENT
12.1 CASH COLLECTION, DEPOSIT AND RECONCILIATION
This section of the manual provides guidelines for the appropriate establishment,
use, and accountability of cash, to safeguard cash and to ensure the timely and
proper posting of accounts. Procedures have been established to encourage
effective administration and internal control of cash handling operations
throughout WAPDA that shall strengthen quality control, management and systems
for financial control.
12.2 SCOPE
This policy shall apply to all personnel involved in handling any WAPDA cash.
Employees with any type of cash handling function shall be required to be familiar
with the requirements of this policy.
12.3 RESPONSIBILITY
Every employee of the Authority is personally responsible for the money which
passes through his hands and for maintaining prompt and correct record of receipts
and payments in the prescribed forms. The personal cash or accounts of employees
of the Authority should not be mixed up with cash or accounts of the Authority.
The G.M. Finance concerned on behalf of the Member concerned shall be
responsible for monitoring & implementing of cash handling activities.
The DDO is the primary disbursing officer of a project and all receipt and payment
on account of Authority made by his subordinates, are made on his behalf and on
his responsibility.
His responsibility also includes:
i. Enforcing policies and procedure governing the cash collection,
handling, custody and cash deposit.
ii. Maintenance of records, accounting for cash received and paid by
WAPDA.
iii. Periodic review of procedure to ensure that sound internal controls are
in place for the safeguarding of assets.
12.4 COLLECTION
1. All moneys received by an employee of the Authority should be deposited not

later than the next bank working day into the bank accounts of the concerned
formation/office.
2. All money received shall be brought into account immediately on double
entry system in the prescribed cash book.

3. The cash book shall be balanced daily and receipts and expenditure shall be
reconciled with bank balances every month.
4. All collected monies should be deposited in the designated bank account of
the concerned formation/office.
5. The DDO shall be responsible to ensure the security and safe-keeping of the
money.
6. Where money is received by a cheque or a bank draft then either the
acknowledgement should be qualified by the words subject to realization of
cheque or a formal acknowledgement should not be given to the payer until
the cheque or draft has been cleared.
7. WAPDA acknowledgement receipt books are obtainable from the Manager
Central Stationery Store for use in the Development Projects/Offices and
hydel formations.
8. Receipts in the prescribed form can be issued only by the person authorised
by the DDO.
9. Before an authorized person signs a receipt in the prescribed form he should
see that the receipt of the money is recorded in the Cash Book.
12.5 DEPARTMENTS AUTHORIZED TO COLLECT MONEY
DDO/PD of all WAPDA formations shall be authorized to collect or receive money

for WAPDA.
It shall be the responsibility of concerned GM to designate employees who shall be
authorized to handle money, and to ensure that they are properly instructed in the
procedures to be followed.
12.6 MAINTAINING CASH COLLECTION RECORDS
The records shall provide clear documentation of cash receipts from the time of
collection to the time of deposit. This information shall always be readily available
for audits.
Computer generated receipts, or pre-numbered receipt books shall be acceptable
forms of documentation. Summary of all receipts issued in a day shall be reviewed
by the concerned officer as deputed by the respective DDO on daily basis.
As a minimum, receipt documentation shall include:
i. Payers name
ii. Amount of payment
iii. Mode of payment (cash, cheque, money order, etc.)
iv. Purpose of payment
v. Date of payment
vi. Initials of WAPDA employee collecting funds
This shall apply to receipts collected directly from individuals, as well as,
received through the mail.

12.7 TRAINING AND ASSISTANCE FOR DEPARTMENTS
The GMF (Co-ordination) shall schedule a mandatory training for all employees
authorized to receive cash receipts who have not already received the mandatory
training. Training Cell shall ensure coaching of departmental record-keeping
guidelines for cash receipts and provide instructions for, but not limited to, the
following:
i. Maintenance of receipt book, or other methods to record transactions
ii. Reconciliation procedures for cash shortages and overages
iii. Receipt of electronic payments
12.8 SAFEKEEPING OF CASH
1. In those offices where for payment of construction wages, large sums of

money are drawn from bank accounts, cash should be kept in strong treasure
chest or safes secured by two locks of different patterns. All the keys of the
same lock not be kept in the same persons custody, and as a general rule,
the keys of one lock should be kept apart from the keys of the other lock, and
in a different persons custody. The chest or safe should never be opened
unless both custodians of the keys are present. In an office which has a
cashier, the keys of one of the locks of or the treasure chest will remain in his
possession. To ensure that the DDO/PD and Cashier both are present
whenever the cash safe is opened the cash safe should be installed in the
room of the DDO/PD.
2. The duplicate keys of treasure chests or safes may at the discretion of the
Project Director, be placed under his seal in the custody of the projects
bank, in the event of this practice being adopted, a duplicate key register
should be maintained and once a year, in each July, the keys should be sent
for, examined and returned under fresh seal, a note being made in the
register that they have been found correct.
3. Cash shall be physically protected through the use of vaults, etc. DDO shall be
responsible to make whatever provisions are necessary to properly safeguard
cash receipts prior to deposit with the bank.
4. When not being used for operational activities, all cash shall be kept in a
safekeeping device, either a safe or locked container.
12.9 SEGREGATION OF DUTIES
1. Cash handling operations shall be subject to daily supervisory review and

management.
2. To minimize the potential for mistakes or misappropriation of cash, the
segregation of cash handling duties shall be in effect.
3. The duties of collecting cash, maintaining documentation, preparing deposit
slips, and reconciling records shall be separated among different individuals.

4. In case where the separation of duties is not feasible, strict individual

accountability and thorough management supervision and review shall be
maintained by the DDO.
12.10 RECONCILIATION AND REVIEW
1. The reconciliation of cash receipts (including cheques) shall be made to

ensure that all cash received is properly deposited and recorded.
2. The reconciliation process shall be done in two ways, daily and monthly.
Reconciliation of all funds received shall be done daily, and a reconciliation
of all funds deposited and recorded shall be completed monthly.
3. Cash receipts shall be reviewed and reconciled to ledger accounts on a timely
basis to ensure that they have been correctly recorded. Accounting
adjustments to ledgers shall also be made on a timely basis.
4. On the day in which cash is collected, a reconciliation shall be performed at
the close of the day when possible, and no later than the beginning of the
next day.
5. The Cashier shall acknowledge each deposit with a written receipt and each
department shall reconcile cash receipts and deposits, to WAPDA financial
accounting system on a monthly basis.
Accounting Entries:
I. When Cash is received:
Dr. Cash Relevant code
Cr. Relevant head Relevant code
2. When deposit is made:
Cr. Cash Relevant code
12.11 CASH BOOK
1. Every office of the Authority handling cash or operating a bank account must
record all its cash transactions in a Cash Book (Annexure-21).
2. A Cash Book which is to be used for recording the transactions of a subsidiary
cash account, imprest or otherwise, maintained at some distance from the office
of Budget and Accounts Officer will have sheets in duplicate, the top sheets
being perforated vertically on the left hand side. When an account of the
subsidiary cash is submitted monthly or at shorter intervals, the top sheets may
be detached from the Cash Book and sent to the main office together with all
vouchers and other supporting documents.
3. The Cash Book is one of the most important accounting records of any office and
every care should be taken to keep it neat, clean and in proper order.

4. The Cash Book must be balanced on the last day of every month, but in any case,
during a month, running totals in pencil must be entered in the receipts and
payment columns on daily basis, and the balance agreed with the actual cash in
hand.
5. Arrangements should be made with banks to send to the accounting office
concerned, as soon as possible, after the end of the month a statement of the
bank current account. If the closing balance shown in the Cash Book differs from
the balance shown in the bank statement as at that date a reconciliation of the
two figures should be prepared and entered in the Cash Book.
6. An entry once made in the Cash book should in no circumstances be erased. A
mistake should be corrected by reversing that entry and writing the correct one.
7. In the offices of General manager Finance (Co-ord., Water and Power) the
Cashier will maintain the Imprest Cash Book (Annexure-22) and also a Chest
Incoming/Outgoing Register (Annexure-23) to record the daily transactions of
moneys received and paid by him respectively against the permanent advance
held by him and the cheque drawn by him for other disbursements like T.A., pay
etc.
8. Both the Imprest Cash Book and the Chest Book will be closed and balanced daily
to show the balances at hand, which will be checked and signed by the Budget
and Accounts Officer-in-charge of the Cash Section.
9. Payments made through banks and posted in the Cash Books maintained by the
Managers Finance (Co-ord., Water and Power) each entry therein will be checked
and attested preferably by the Budget and Accounts Officer.
10. At the close of each month the cash books will be checked by the Director,
Budget and Accounts (Co-ord., Water and Power) and the summary thereof
signed by him.
11. In formation/project office, the Budget and Accounts Officer and the DDO should
check all the entries in his Cash Book, at least every week after the date of their
occurrence and he should initial the book, dating his initials after the last entry
checked. The Cash book should be signed by him at the end of month and such
signature should be under-stood as acceptance of responsibility for all the entries
of the month inclusive of the closing balance. This procedure will, however, not
relieve the Project Director / Resident Representative, as Incharge of the Project
/ Regional Office, of his responsibility of seeing that the funds placed at his
disposal are disbursed in a proper way, and under due authority.
12. The actual balance of cash in an accounting office should be counted at the close
of business on the last working day of each month or before the commencement
of business on the first working day of the following month and such balance
agreed with the Cash Book balance. Where there is any discrepancy, an entry
should be made in the Cash Book, supported by a voucher giving full particulars
and duly authorized by the highest executive official in that accounting unit.
13. In addition to the monthly check of cash and the Cash Book the Heads of
Offices/Disbursing Officers shall, count the cash in the chest, daily in the
presence of the Cashier and record a certificate on the cash book writing the
amount of the cash counted in words and figures, over their full signatures.

14. The Heads of Offices/DDO shall also make surprise checks and count cash in the
safe in the presence of the Cashier.
12.12 CASH DISBURSEMENT
The relevant GM Finance shall be responsible for the establishing and enforcing
policies and procedures governing the cash disbursement, maintenance of the
records, accounting for cash disbursed and performing periodic reviews of
procedures being followed.
The DDO shall be accountable to respective GM Finance on behalf of Member
concerned, for the proper execution of matters ancillary in the administration and
monitoring of the cash handling activities.
12.12.1 Authorization and Processing of Disbursement
Following procedure shall be followed for authorization of cheque payments:

i. Cheques shall be prepared by specified employees in the Budget & Accounts
Section independent of those giving voucher and invoice approval. Employees
preparing cheques shall verify data with vouchers for accuracy.
ii. Cheque requests shall be approved for payment by an appropriate official
before cheques shall be written by the cashier. Cheques shall only be paid
to a specific payee.
iii. A record of cheques written shall be retained in a Disbursements Journal.
Supporting documentation shall be marked as Paid to avoid duplicate
payments.
iv. Payroll transfer letter shall be accompanied by a cheque.
v. No authorized cheque signatories shall have the responsibility for voucher
preparation, cheque preparation, cash receiving, petty cash, purchasing and
receiving, or time keeping for payroll records.
vi. All non-cheque disbursements, such as online transfers, shall be approved
by the respective DDO.
12.12.2 Demand for Funds
1. At the request of Project Directors, routed through the General Manager

concerned the Manager Finance (Water, Power and Co-ord.) will transfer funds
from their bank accounts to the bank accounts of the Projects.
2. The Authority has to pay interest on the funds it receives from Government. It
is, therefore, essential that a project should not keep in its bank accounts
funds surplus to its immediate requirements. At the beginning of every month,
a Project Director should normally ask for a transfer of funds, which with the
amounts already in hand and in his bank account or accounts, would be
sufficient to meet his estimated requirements to the tenth day of the following
month.
3. All requests for disbursements shall be made on a Disbursement Request Form
to be issued by the respective GMF. The demand shall be raised by the relevant

formation as per Annexure 24, 25, 26, 27 and 28 for development projects and
Annexure 29 for additional demand by power wing formations (Hydel
operations). The form shall be completed in its entirety and shall contain the
details for which the funds are required (i.e. materials to be purchased,
meetings to held and with whom etc.), alongwith copies of supporting
documentation (i.e. detailed invoices or receipts for all expenses incurred/to
be incurred).
4. If the form is incomplete or some pertinent supporting documentation is
missing, the missing information shall be identified and the request shall be
returned to the sender.
5. The disbursement shall not be made for:
i. Personal expenses i.e. meals, room, travel for a spouse or family, or when
not on bona-fide purpose except as per terms of appointment.
ii. Purchase and/or maintenance of equipment located at a home or other off-
site location.
iii. Political contributions.
iv. First class airline tickets, except for overseas travel, otherwise shall be pre-
approved due to justifying circumstances.
v. Cash Payment
12.12.3 Accounting Entries to be Passed
Once the bill of the contractor is finalized and approved by the DDO, the B&AO of the
accounting unit passes the following entries:
1. Journal Voucher to record the liability
Account Tile G/Ledger code
Dr. Work in Progress Relevant code
Cr. Payable to Contractor Relevant code
Cr. Retention Money payable Relevant code
Cr. Tax deducted at source Relevant code
Cr. Mobilization Advance Relevant code
2. On receipt of funds the following entry is passed.
Dr. Bank Account Relevant code
Cr. Head office account Relevant code
3. When payments are made
Dr. Payable to Contractor Relevant code
Dr. Tax deducted at source Relevant code

Cr. Bank account Relevant code
12.12.4 Payment to Employees
The employees should be paid through their bank accounts and cash payments shall
be discouraged at all levels. Cash payment shall be made only in special cases.
12.12.5 Payment to Other Parties
1. All payments to outside parties should be made by cheques. Disbursements

may, however, be made in cash for meeting petty charges for traveling,
motor vehicle maintenance on tour, value payable postage, purchase of minor
items of stationery etc. Such petty expenses should be met from the Petty
Cash Imprest.
2. As a rule, no cheque should be drawn until it is intended to be paid away and
cheques drawn in favor of contractors, suppliers of materials and services and
others should be made over to them by the disbursing officer or his Budget
and Accounts Officer, direct or by a cashier, if there is one in the Project
Office.
3. GM Finance concerned may designate a cashier where the cash transactions of
the project are sufficiently extensive to require one.
4. It is a serious irregularity to draw cheques and not send these to the payee or
to deposit those in the cash chest or to draw cash from the bank and to
deposit it in the cash chest. Any such window-dressing will be evident in the
accounting procedure adopted by the Authority and disciplinary action will be
taken against any officer/official who resorts to such practice.
5. Payment due to contractors or suppliers of goods and services may, if so
desired by them, be made to their banks instead of direct to contractors or
suppliers provided that:
i. Instructions in writing are given by the contractor or supplier under his
own signature that payment of the bill, be made to his designated bank.
ii. Project Officer obtains an authorization from the contractor or supplier in

the form of a legally valid document such as a power of attorney
conferring authority on the bank to receive payment.
iii. Project officer obtains the contractors or the suppliers own acceptance
of the account made out as being due to him by the Authority, or his
signature on the bill or other claim preferred against the Authority before
settlement of the account of the claim by payment to the bank.
iv. The bills are submitted to the project office through the bank. In such a
case the receipt given by the bank shall constitute a full and sufficient
discharge for the payment.
6. Nothing contained in the preceding paragraph shall operate to create in
favour of the bank any rights or equalities viz-a-viz the Authority.

12.12.6 Payees Acknowledgement
1. Every voucher should bear or have attached to it an acknowledgement of the

payment signed by the person by whom or in whose behalf the claim is put
forward, or by his duly constituted attorney. This acknowledgement should be
taken at the time the payment is made. When the payee signs in a Pakistan
script, he should be required to note the amount acknowledged in the script
in his own handwriting.
2. If a disbursing officer anticipates any difficulty in obtaining from a person to
whom money is due, a receipt in the proper form, it is open to the former to
decline to hand over the cash or send the cheque until the acknowledgement
of the payment, with all necessary particulars, has been given by the latter.
Where in such a case payment is to be made by a remittance to the creditor,
then the remittance should be made by a cheque, crossed and payable to
Account Payee only.
3. In the case of articles received by value-payable post, the value-payable
cover with the invoice or bill showing the details of the items paid for may be
accepted as a voucher. The disbursing officer should endorse a note on the
cover to the effect that the payment was made through the post office and
this will also cover charges for the money order commission.
12.12.7 Travel Reimbursement
In order for these expenses to be reimbursed, a properly executed expense

reimbursement request relating to attending a conference, a copy of the brochure
with a note stating the traveler attended the event, shall be acceptable that shall
be submitted with reimbursement form. All receipts shall be attached to the form
and the proper authorization(s) shall be obtained.
12.12.8 Cash Disbursements Internal Control
Internal control over disbursements is best maintained when the authorization,

processing, cheque signing, recording, and bank reconciliation functions are clearly
segregated. Persons authorized to approve expenditures shall be identified, and
threshold limits established or double signature requirements defined. In no case
the authorized cheque signatories shall sign blank cheques.
12.12.9 Review
All disbursements shall be reviewed for accuracy by the DDO/PD, before the
cheques are signed.
All disbursements are made by the DDO/PD through his Budget and Accounts
Officer. The Project Director is the primary disbursing officer of a project, and all
receipts and payments on account of the Authority made by his subordinates are
made on his behalf and on his responsibility. Project director is also responsible for
maintaining records of all Receipts and Payments made by his subordinates.
Accounting Entry:
Following entry shall be passed for recording of disbursements:


Dr. Relevant Head Relevant code
12.13 PETTY CASH MANAGEMENT
The Authority has delegated the authority and responsibility for establishing policies
and procedures for all cash handling activities to the respective heads of wings. The
DDO of the formation/project shall be primarily responsible for custody and
maintenance of effective controls over the cash/funds of WAPDA. He shall ensure that
the following is strictly complied with:
i. Enforcing policies and procedures governing the receipt, handling, custody,
and disbursement of funds.
ii. Requiring the establishment and maintenance of records, accounting for
funds received and paid by WAPDA.
iii. Performing periodic checks of the persons with cash handling operations.
iv. Establishing and authorizing procedures for granting, maintaining, and
terminating departmental petty cash funds.
12.13.2 Appointment of Petty Cash Custodian
The respective DDO shall appoint and approve the appointment of a custodian to
monitor its use and replenishment. A custodian cannot appoint or approve
himself/herself. In addition, there shall be limited access to the fund.
Budget & Accounts Officer shall be notified if there is a change in the petty cash
custodian. In order to ensure accountability to the new custodian, Budget &
Accounts Officer shall document the fund at the time of the change.
12.13.3 Responsibilities
It shall be the responsibility of the custodian to ensure that this fund shall be used
to cover only those expense reimbursements for which it is not possible to use
normal purchasing methods such as purchase order. In addition, the custodian shall
ensure that fund use is consistent with the manner described in the documentation
that initially established the fund.
An account of the imprest cash should be kept in the Imprest Cash Book. This book
is in duplicate with the top sheet perforated vertically on the left side. At the end
of the month or whenever further reimbursement is required, the book should be
balanced and the top sheets with all the relevant vouchers should be sent to the
officer who reimburses the imprest. This book will in any case be balanced and
closed daily under the signatures of the Disbursing Officers throughout WAPDA
provided that in case of the offices of General Manager Finance (Co-ord., Water
and Power) signatures of the Budget and Accounts Officers, Incharge of the Cash
Section, will suffice.

12.13.4 Safekeeping
The imprest-holder is responsible for the safe custody of imprest moneys and he
must at all times be ready to produce the total amount of the imprest in vouchers
or in cash. Physical security shall be emphasized to the employee involved in cash
handling. The following general guidelines shall be followed to maintain the
integrity of those who are handling cash:
i. Unauthorized persons shall not be allowed in areas where cash is handled.
ii. Safe doors shall be kept closed during working hours and locked at times
when it is not necessary to be in and out of the safe.
iii. Individuals shall keep working funds to a minimum at all times. Cash shall
never be unattended. If an employee leaves his or her work station for any
reason, regardless of how briefly, cash shall be appropriately secured in a
locked place.
iv. For overnight storage and during other periods when cash is not being used,
it shall be kept in a safe.
v. Under no circumstances an individual shall keep WAPDA cash with their own
personal funds, deposit WAPDA funds in a personal bank account or take
WAPDA funds to ones home for safekeeping.
12.13.5 Documentation
The Custodian shall properly document each transaction in the following manner:
i. Record each transaction on the petty cash reconciliation, identifying all
pertinent information (Payee, purpose, transaction detail and date of
expense). Identify the department and expense code to be charged.
ii. For reimbursement of business meals the names of the individuals in
attendance, the business purpose, date, and place of meeting shall be
clearly stated on either the petty cash reconciliation or the supporting
documentation.
iii. In all other cases the individual receiving the payment shall either sign the
petty cash reconciliation or the documents to acknowledge the receipt of
cash.
iv. Attach all original receipts to the petty cash reconciliation statement.
12.13.6 Reconciliation
The petty cash reconciliation shall be kept indicating the amount disbursed, the
purpose of the withdrawal, and the signatures of the person receiving the cash.
The receipts, plus cash on hand, shall equal the total amount of the fund at all
times.
12.13.7 Reimbursement Petty Cash Fund
When the petty cash cheque shall be entered into the computer system the debits
shall be made to the expense accounts affected by the summarized transactions.

Once the petty cash fund is reimbursed, all petty cash vouchers and related
supporting documents attached to the cheque request shall be marked "PAID" to
prevent reuse.
12.13.8 Cash Disbursements From Petty Cash
Disbursements of small amounts of cash shall be made from the petty cash fund for
minor expenses. A petty cash voucher shall be completed and signed by the
individual requesting the funds. Vouchers shall be approved by the respective DDO
for the cash disbursement. In case of Imprest accounts maintained at other offices
or departments or location etc the petty cash voucher shall be approved by the
head of department/managers/incharge of the office as the case may be.
Normally the following procedure shall be followed for managing the petty cash:
i. The limit for a Petty Cash Imprest should be kept to the minimum which
may be expected to be required in a period of ten to fifteen days.
ii. The reconciliation of the account shall be prepared on a daily basis.
iii. Cashier shall prepare a petty cash voucher with description, date, name of the
person to whom cash is given, the amount, and the signature of the staff
member in charge of the petty cash. This voucher shall be kept in a cash
voucher file.
iv. When a receipt of cash is being made, it shall be checked and attached with
the voucher to complete the entry in the file.
v. Cashier, who is in-charge of the imprest account shall check the petty cash for
vouchers with number of supporting documents and notify the person with the
cash to provide the receipts.
vi. The petty cash shall be kept in a fire-resistant safe.
vii. To replenish the imprest account, person in-charge of the imprest account
shall prepare the imprest sheet on a daily basis which contains the details of
expenses.
viii. Periodically, the DDO shall make unannounced counts of the petty cash.
ix. The annual closing of petty cash shall take place on June 30th.
12.13.9 Reporting Stolen or Lost Petty Cash
In the event that petty cash is stolen, the following procedures shall be followed:
i. Inform security personnel of the theft.
ii. Obtain a copy of the incident report and attach to the petty cash
reconciliation. Submit the reconciliation and report to the DDO.
iii. Insurance claim procedure should be followed immediately, if applicable.
12.13.10 Closing a Petty Cash Account
The petty cash fund shall be closed when the purpose for which the fund is
established, has been completed, as determined by either the Department Head or

the management of WAPDA. In addition, the DDO shall reserve the right to conduct
periodic usage reviews and, based on the results, shall request closure or reduction
of the fund.
12.14 BANK ACCOUNT OPENING, MAINTENANCE AND CLOSING
The objective of this policy is to set out a mandatory process for opening,
maintaining and closing accounts with banks and other financial institutions and to
ensure that WAPDA maintains adequate control over its funds through the creation
of a formal process for establishing and maintaining WAPDA bank accounts.
This policy shall apply to all accounts that shall be used for the benefit of, or in
connection with, WAPDA program or activity and shall govern all bank accounts
maintained for operating purposes.
1. The Member concerned shall have the power to approve the establishment
of bank accounts for WAPDA purposes. No accounts in the name of WAPDA,
shall be operated without the prior written consent of the Member
concerned.
2. The respective DDO shall ensure compliance with WAPDA policies and
procedures, timely reconciliation of bank accounts, adequate segregation of
duties regarding the administration of the account, monitoring the
continued need or appropriate structure for such accounts, and other
oversight requirements as appropriate.
3. The respective DDO shall be accountable to respective GM Finance on behalf
of the Member concerned, for the proper execution of matters ancillary to
the administration of bank accounts as are necessary for the establishment
and maintenance of bank accounts.
12.14.2 Bank accounts for Federal/ Provincial Water/Power Projects
1. The Head Offices of Water and Power Wings will keep the following
separate bank accounts with the National Bank of Pakistan, WAPDA House
Branch, Lahore for funds to be received from the Federal and Provincial
Governments, in line with instructions issued by AGPR from time to time.
i. The General Manager Finance (Water/Power) will have one bank
account for Federal Water/Power Projects. All releases obtained from
Federal Government for Water Projects will be credited to this account.
ii. The General Manager Finance (Water/Power) will have one separate
bank account for Provincial Water/Power Projects. All releases obtained
from Provincial Government for their respective projects.
2. Separate column for each Province will be maintained for these funds in the
Cash Book, in order to keep separate record of transactions relating to each
Province.
3. The General Manager Finance (Water/Power) will distribute these funds to
the concerned Projects according to their demand.

4. Opening and operation of Assignment Accounts shall be as per the

instructions of the Controller General of Accounts.
12.14.3 Bank accounts for Common Services and Authority Secretariat
For the purpose of administrative convenience, the accounting and payments of

Common Services and Authority Secretariat shall be dealt with by the GMF (Co-
ord.) under the Member Finance. For this purpose he will have separate bank
accounts for placing funds, to be received for utilization on Common Services. All
payments relating to Common Services and the Authority Secretariat will be
made out of this account by the Manager Finance (Co-ord).
In these accounts amounts representing overheads will be credited. The amount
of overheads as approved in the detailed budget will be withheld by the General
Manager Finance (Water) and General Manager Finance (Power) at the time of
making monthly releases to the General Managers/Project Directors and
transferred to the General Manager Finance (Co-ord) for credit to the bank
account maintained for Common Services. Miscellaneous receipts accruing on
account of Common Services will be credited to this account, if any.
12.14.4 Bank accounts for Revenue and Projects
1. The General Manager Finance (Power) under Member (Power) will have two
separate bank accounts one for Electricity Revenue and the other for funds
to be released by the Federal Government for Power Development Projects.
2. For this purpose the General Managers concerned will submit their monthly
demands to the Member (Power) and funds will be allotted to the various
Power Development Projects on the recommendations of the General
Managers concerned.
3. Funds for meeting expenses on account of Customs Duty and Sales Tax for
imported goods and materials will be remitted to the CRRK by the General
Manager Finance concerned.
4. On instructions from the General Manager Finance concerned one or more
bank accounts may be opened for a project. Normally an account will be
opened with one of the designated banks at its branch nearest to the
project office. A project office will normally be located near the
construction site.
5. For disbursement at site, subsidiary bank accounts may be opened with the
branches of designated banks. Such subsidiary bank accounts should be
operated by an Executive Officer jointly with a member of the Budget and
Accounts section, at site.
6. Where the need for a separate WAPDA bank account has been identified, a
written request shall be made to the concerned Member. Arrangements for
the maintenance of appropriate records and reconciliations shall be
established and approved by the respective GM Finance.
7. Subsequently, if any such bank account becomes unnecessary, a written
request for the closure of bank account shall be submitted in writing to the

respective GM Finance for authorization and final approval by the respective

Member. After approval, the respective GM Finance shall contact the
financial institution to close the account.
8. Existing bank accounts and related business processes shall be used to
facilitate the deposit of cash receipts and disbursement of payments by
WAPDA. The copies of Challan forms/Deposit Form/ Slips shall be available
in the Budget & Accounts Office for deposit purposes.
12.14.5 Recording Bank Accounts and Related Activity in the General Ledger
Whenever a bank account is opened a separate code is allotted to it in Chart of

Accounts. All WAPDA bank accounts shall be recorded in WAPDAs general ledger
immediately upon the establishment of such accounts. Activity related to WAPDA
bank accounts, including deposits, disbursements, transfers to other accounts,
and other transactions shall generally be recorded in WAPDA official accounting
records within twenty-four (24) hours.
12.14.6 Administration and Oversight of WAPDA Bank Accounts
1. All bank accounts of the Authority should invariably be operated by DDO /

PD jointly with an officer from Budget and Accounts side. On a construction
project this would require operation of bank accounts by the Project
Director or by an officer on the Executive side nominated by him jointly
with an officer from Budget and Accounts side.
2. This requirement of joint operation would also mean that all instructions to
banks whether for opening of a letter of credit, making a remittance, online
transfers or for entering into any commitment will require two signatures,
one of which must be of an officer on the Executive side and the other of
Budget and Accounts side. Every debit appearing in bank account other than
that for bank charges must be supported by a cheque bearing the signatures
of two persons authorized to operate the particular bank account.
3. Bank accounts other than those of Manager Finance (Co-ordination,)
Manager Finance (Water and Power) may be maintained either with a fixed
imprest or by round sum, remittance varying with estimated requirements.
4. The respective GM Finance shall be responsible for issuing and maintaining
policies and procedures governing the establishment and maintenance of
WAPDA bank accounts. The respective GM Finance shall also be responsible
for conducting and/or reviewing the reconciliation of WAPDA bank accounts
on a periodic basis. The respective GM Finance shall maintain a current list
of all authorized bank accounts, including the respective bank at which the
account is held, account number, account description, purpose, responsible
official, authorized signers, limitations on cheque amounts, and other
relevant information. The respective GM Finance shall also secure and
maintain formal documentation which will set forth the authorization of
bank accounts, maintenance of signature cards, and other relevant
correspondence and documentation.

12.14.7 Cheque Books
On receipt of a Cheque Book from the bank, the Accounts Officers authorized to
keep custody of the cheque books count the blank cheques to see that none is
missing, and a receipt issued to the bank on its printed form. He should also record
a certificate of count and correctness of the number of forms contained in the
Cheque Book in a register to be maintained for this purpose (Annexure-30).
12.14.8 Cheque Books Custody
1. Cheque Books must be kept under lock and key but apart from cash, in the
custody of an officer not lower in rank than a Grade-17 officer and must not
be retained by the Cashier except for writing cheques and arranging their
dispatch to the payees etc. during working hours.
2. In Project and Field Offices also the senior most Budget and Accounts Officer
should act as custodian of the cheque books and they would be responsible to
keep the same under lock and key.
3. In offices where Grade-19 Budget and Accounts Officers are posted, a Grade-
18 or 17 (Co-ord.,) Budget and Accounts Officers will be nominated by such
Grade-19 Budget and Accounts Officer to be incharge of the Cash Section for
all purposes including safe custody of Cheque Books which should be kept
under lock and key.
4. In WAPDAs Head Offices i.e. offices of General Managers Finance (Power),
Manager Finance (Co-ordination), and Manager Finance (Water), Cheque
Books should be kept in the personal custody of the Budget and Accounts
Officers Incharge of Cash Section.
5. In Pension Section, Gratuity Section and Group Life Insurance Section, Cheque
Books should be kept under lock and key by the respective Grade-17 Budget
and Accounts Officers Incharge of the sections.
6. In the case of signatories of the Office Bank Account at Head Office, the
signatory of the accounts side shall be regarded as first signatory and it shall
be his duty to obtain signatures of the other co-signatories of the executive
sides.
7. In Project Offices where Accounts Assistant are working as Head of
Accounts/Cash Section, Cheque Books must be kept under lock and key by the
concerned Project Directors, as the case may be.
12.14.9 Cheques Writing Procedure
When cheques are written out, in order to reduce the risk of fraudulent alteration
spaces should not be left blank in front of or between or after the words and
figures of the cheques. Unless the cheques are to obtain cash they should be
crossed and made payable to order. If a cheque is in the name of a company or
firm or of a person who is known to have bank account the cheques should be
crossed and the words Accounts Payee only be entered between the crossing
lines. The counterfoil of the cheques should always show the name of the payee

and the amount in words and figures and it should be initialed by both the
signatories of the cheques.
In view of the fact that cheques are to be crossed and made payable to order or to
Account Payee only it is important that the names of the payees are correctly
written on the cheques.
Cheques may be cancelled for errors in writing or any other reason. The cancelled
cheque shall be clearly marked as void. All void cheques shall be kept in a file in
numerical order for audit purposes.
12.14.10 Expired Cheque Cancellation Procedure
If the currency of a cheque should expire owing to its not being presented at the
bank for payment within six months after the date of its issue, it may be received
back by the drawer who should cancel it by first crossing out the signature and
then drawing two paralleled lines across the cheque and by writing cancelled in
between the line and then issuing a new cheque in lieu of it. The fact of
cancellations and the number and the date of the new cheque should be noted on
the counterfoil of the old cheque, and the cancelled cheque should be pinned to
the counterfoil of the new cheque. The fact of the cheque having been issued
should be entered on the date of issue in the particular column of the Cash Book,
but the amount should not be entered in the column for payment except in a case
where a fresh cheque is being issued in lieu of a cheque which had remained
unpaid for six months after its issue, and the amount had been written back in
accordance with the instructions. In such a case the amount of fresh cheque issued
will be entered in the column for payment and debited to the account which was
credited at the time of the cancellation of the original cheque.
Stop payment orders shall be issued for cheques that are lost in the mail or for
other valid reasons. Stop payments shall be processed by telephone instruction and
followed by written authorization to the bank by signatories.
12.15 CHEQUES RECEIVED BY WAPDA
The objective of the policy is to establish procedures and guidelines that shall be
followed to identify the process that shall assist in expediting the collection of
cheques when performing the cheque acceptance activities ensuring that only
those cheques are accepted that are in accordance with the standards mentioned
in this policy.
The compliance of following procedures shall be ensured:
i. Cheques shall be made payable to the Water and Power Development
Authority. Third party cheques shall not be acceptable. The following
information must be on each cheque:
a) Serial No, Account No, bank address
b) Amount (both written and numerical)
c) Authorised signature (on the signature line)
d) Valid date

ii. Cheques accepted for payment may be returned by the bank due to
insufficient funds or some other reason. The Budget & Accounts Office shall
be notified of the returned cheque, and it shall be the department's
responsibility to collect the funds owed and any bank fees. A returned
cheque shall be debited to the same account to which it was initially
credited.
iii. WAPDA shall accept personal cheques for payment until an individual
presents a returned cheque for payment.
iv. A cheque made payable to WAPDA but drawn on an account other than that
of the person presenting the cheque for payment shall be accepted with
notation of the other persons name and/or identification number.
v. Receipt procedures shall remain in effect when payment is made by
personal cheque.
vi. Individuals shall be charged a stated amount for the handling of a returned
cheque and no additional cheques shall be accepted from the individual
until the said amount of the returned cheque is paid.
vii. An individual who presents a second returned cheque shall be barred from
paying by cheque in the future.
viii. An individual who makes payment with a forged cheque shall be prosecuted
under appropriate statutes.
ix. The following steps shall be strictly followed when accepting cheques:
a) Verify the identity of the presenter using photo ID
b) Verify account of account holder
c) Avoid accepting cheques from a new account without verification
d) Ensure that the cheque is made out to WAPDA and is properly dated
and signed
x. The staff person recording payment information shall record cheque number
as part of the payment record and follow approved cash receipts procedures.
xi. The Budget & Accounts Officer shall:
a) Follow cash receipts procedures for deposit
b) If cheque is returned, shall make copy of cheque and forward original
to the person that accepted cheque
c) Record appropriate book keeping data to adjust deposit and income
figures and bank charges
d) Maintain listing of individuals who have presented returned cheques
e) Limitations on Acceptance of Cheques
i. The Budget & Accounts Officer shall not be authorized to
return cash to a person in the event that the cheque exceeds
the amount due to WAPDA. In such cases the payment shall
be made through a cheque.

ii. The formations shall not be authorized to cash personal

cheques for any reason or amount.
iii. If the bank returns a personal cheque for insufficient funds or
other reasons, the amount of the returned cheque shall be
charged to the payers account. The payer who presented the
cheque shall be immediately contacted. It shall be the
responsibility of the Budget & Accounts Officer to collect the
amount of the returned cheque and the service fee from the
original payer.
12.15.1 Foreign Cheques
The Budget & Accounts Officer shall receive and accept foreign currency cheques.
The cheques shall be accepted in the form of foreign currency from countries as
upon the discretion of the Authority. The Budget & Accounts Officer shall retain a
copy of each foreign currency cheque deposited in the bank.
The face value of the deposit shall be noted on the monthly deposit report, which
shall include the foreign currency, and the amount of the foreign currency.
The Budget & Accounts Officer shall receive credit advices in order to confirm
and/or match activity from WAPDA bank. Documentation shall be forwarded to the
Budget & Accounts Officer where the net amount shall be posted to the monthly
deposit report specifically designed for foreign cheques and the corresponding
entries shall be prepared.
The credit advice shall include the following:
i. currency, name of drawer and endorser,
ii. WAPDA bank account number credited,
iii. face amount of cheque,
iv. exchange rate,
v. Fee and a copy of the cheque.
12.15.2 Cheque Encashment
1. Anyone authorized in this behalf may en-cash cheques at the branch located
in WAPDA area in accordance with the bank's usual policies. WAPDA payroll
and travel / reimbursement cheques may be cashed at this branch as well.
2. Cheques shall be signed as referred in policy on Authorization and Processing
of Disbursement.
3. Payroll transfer letter shall be considered a cheque and shall require two
authorized signatures.
4. The Budget & Accounts Officer shall prepare cheque from authorized voucher.

12.15.3 Security
As cheques are forms of cash, therefore, shall be guarded with the same degree of
security and deposited with the same frequency as currency. The DDO shall be
responsible for secure and reliable transportation of the department deposits via
armored car services, WAPDA security escort or courier, or in-person delivery to
deliver the deposits to the Bank.
Accounting Entry
Following entry shall be passed on the receipt/deposit of cheque:
Cr. Relevant Head Relevant code
12.16 BANK RECONCILIATION STATEMENT
The GMF of respective wing shall ensure compliance with WAPDA policies and
procedures in the timely reconciliation of bank accounts, adequate segregation of
duties regarding the administration of the account, monitoring the continued need
or appropriate structure for such accounts, and other oversight requirements as
appropriate. The standard format for the Bank Reconciliation Statement is as per
Annexure-31.
The objective of this policy is:
i. To provide guidelines for the development of WAPDAs bank reconciliation
procedures.
ii. To ensure that only bona fide bank transactions are recorded in WAPDAs
general ledger.
iii. To ensure that WAPDA maintains adequate control over the process of
comparing the accounting records to the banks records in order to resolve
any possible discrepancies which may arise due to the timing differences
between when data is entered in the bank systems and when data is
entered in WAPDA system, or due to any error.
At the formations/projects bank reconciliations shall be prepared by the Budget &

Account Officer and reviewed by the respective DDO/ PD. The DDO/ PD shall be
accountable to respective GM Finance.
12.16.2 Guidelines for Bank Reconciliations
1. Bank accounts shall be reconciled monthly by the respective B&AO. Bank

statements shall be received unopened from banks for all accounts. The bank
accounts which shall be used more frequently can be reconciled on daily
basis.

2. The concerned Accounts Staff shall compare dates and amounts of daily
deposits on bank statements to the cash receipts journal as well as bank
transfers and any items rejected by the bank due to insufficient funds, etc.
3. Reconciliation procedures shall include the following steps:
i. Compare the cash receipts to the receipts shown on the bank statement
(the credits on the bank statement); for each receipt that agrees, mark the
item in both the cash book and the bank statement.
ii. Compare the cash payment to the payments shown on the bank statement
(the debits on the bank statement); for each payment that agrees, mark
the item in both the cashbook and the bank statement.
iii. Any un-marked items on the bank statement (other than rare errors
made by the bank) shall be items that should have been entered into
the cash books, but have been omitted for some reason; these should be
entered into the cash book and then the amended balance on the cash
book can be found. To find the correct cash book balance a ledger
account shall be used for the bank with the original cash book balance
shown as the brought forward balance and any additional payments
shown as credits and receipts as debits.
iv. Finally, un-marked items in the cash book shall be the timing
differences; un-presented cheques, these shall be used to reconcile the
bank statement closing balance to the corrected cash book closing
balance.
4. Cheques outstanding for six months shall be investigated by the respective
DDO/ PD.
5. Upon completion of the reconciliation process, the respective DDO/ PD shall
review the statements and approve adjustments to cash accounts.
12.16.3 Report Preparation
Monthly reports shall be prepared to document the reconciliation of each bank

account and the review of entries in the financial records. Reconciliation reports
shall be completed and reviewed in a timely manner after the bank statements
have been received. The persons preparing and reviewing the reconciliation report
shall date and sign the report indicating the date the reconciliation report was
completed and the date on which review was made. Reconciliation report shall
include:
1. Verification that the entries (i.e. deposits, wire transfers, withdrawals,
expenditures and revenue) on bank statements and financial reports are
accurate and correspond with WAPDA financial records.
2. Identification of all reconciling items and the separation of those into timing
differences and differences requiring adjustments to clear either by the bank
or with an adjusting journal entry in the financial records.
3. Completion, review and approval of the reconciliation.

4. Substantiation of the preparation and timely transmittal of requests for

corrections.
Documented requests for bank adjustments shall be forwarded to the person
concerned. Journal entries developed for clearing other differences shall be
completed and submitted to the respective DDO/ PD for review and after approval by
the respective DDO/ PD the data shall be entered appropriately into the system.
12.16.4 Bank Reconciliation Record
Reconciliation reports shall be retained in a separate folder and made available to

internal auditors upon request. Copies of the bank reconciliation shall be provided to
the respective GM Finance for further review when demanded Reports shall be
retained in accordance with records retention guidelines.

13 PAYABLES, ACCRUALS AND DEPOSITS

13.1 ACCOUNTS PAYABLES
The objective is to establish guidelines regarding the accountability of transactions

related to payables ensuring that:
i. Disbursements are properly authorized.
ii. Invoices are processed in a timely manner.
iii. Vendor credit terms and operating cash are managed for maximum benefits.
13.2 RESPONSIBILITY
The respective DDO / PD has overall responsibility for the administration of

accounts payable function at the formations/projects.
13.3 RECORDING OF ACCOUNTS PAYABLE
All valid accounts payable transactions, properly supported with the required
documentation, are recorded as accounts payable in a timely manner. Information
is entered into the system from approved invoices or disbursement vouchers with
necessary documentation attached. Only original invoices are processed for
payment unless duplicated copies have been verified as unpaid by researching the
vendor records. No vendor statements are processed for payment.
The following are the minimum requirements which shall be necessary for the
Budget and Accounts Office to process the payables:
i. All required parameters for the payments are covered, which are:
a) Proper invoice of the vendor/supplier
b) Proof of receipt of goods or completion of services
c) Proof of prior approval of the competent authority
d) Availability of budget limits
e) Purchase order or running contract or single payment
f) Urgent payments are being requested and carry approval of the Head
of Department
g) Advances are being made on proper approvals and that previous if
any are settled
h) Salaries are being processed according to the laid procedures
i) All regular payments on account of rents, rates and taxes are being
made according to the agreements
j) All contractors bills are being processed according to the agreement
ii. In case of any deficiency the accounts section will return the payment claim
with remarks to the concerned section for rectification of the short coming.

iii. In case payment being in accordance with the laid procedures, the accounts
section shall process the recording of the payables and forward approved
voucher etc., to the banking section/department for processing of payment.
13.4 AUTHORIZATION
Documents presented for accrual/payment are reviewed and authorized by the

concerned Director Accounts/DDO/Project Director.
13.5 ACCOUNTING FOR SUPPLIER BILLS
On receipt of material order, the procurement department will write detail of

material purchased in SMB as per details of supplier invoice. Following documents
are attached to the suppliers invoice and sent to the accounts section:
i. Vendor invoice (or employee expense report).
ii. Packing slip (where appropriate).
iii. Purchase Request or Purchase order as required by procurement policies.
iv. Copy of GRN/SMB for receipt of material
v. Any other supporting documentation deemed appropriate.
vi. Inspection certificate
The accounts section will record the purchases and create liability for payment to
the supplier through posting the SMB in the general ledger module.
13.6 ESTABLISHMENT OF CONTROL DEVICES
The staff at Budget and Accounts Office establishes control of invoices as soon as
they are received. Vendors are instructed to mail all invoices directly to the
Procurement Department. Upon receipt, each invoice is stamped and delivered to
the payable desk. Any invoice out of the control of the accounting staff is copied
and kept in an accounts payable follow-up file.
The following procedures are applied to each bunch of documents by the Budgets
and Accounts Officer:
i. Checking of the mathematical accuracy of the vendor invoice.
ii. Comparing the nature, quantity and prices of all items ordered per the
vendor invoice to the purchase order/request and packing slip.
iii. Ensuring the goods have been received/services rendered
iv. Documenting the general ledger distribution, using WAPDAs current chart
of accounts.
v. Confirming the review and approval of the DDO / PD associated with the
goods or services purchased.

13.7 PAYMENTS UNDER THE CONTRACTS FOR CIVIL WORKS
13.7.1 Advance Payments
Advance payments to be made on signing the contract (for mobilization and similar
expenses) shall be related to the cost of goods, works or services covered by the
contract. The advance payment whether for mobilization or other purpose shall be
released only after furnishing a bank guarantee for the specified amount and from a
bank of good repute. The bank guarantee shall always be verified/got confirmed
from the issuing bank.
13.7.2 Progress Payments
Progress payments shall be made in accordance with the terms of the contract and
after compliance with the conditions laid down in the contract for such payments.
The application for payment submitted by the contractor shall be reviewed by a
designated official to verify that:
i. Payment is due and in accordance with the terms of the contract
ii. All conditions laid down in the contract have been complied with
iii. All the details of work done or goods supplied have been recorded
iv. Rates are as agreed
v. Quantity and quality have been verified by technical person.
13.7.3 Retention Moneys
The retention moneys shall be deposited in a separate bank account of the

concerned GMF. These shall become payable to the contractor or supplier upon
successful completion of the contract, at the end of the warranty period or on
another specified date determined in accordance with normal practice.
In the event of default or non-performance under a contract, the project entity shall
use funds from retention money account to complete the work or to repair defects
during the maintenance or warranty period.
13.7.4 Currency of Payment
Payments under each contract shall normally be made in the currency or currencies
in which the price has been stated in the successful bid. However, if the bidder has
shown the percentage of payments to be made in other currencies, the exchange
rates for a reference date specified in the contract shall be used to maintain the
value of the foreign currency portions of the contract price - without loss or gain.
13.7.5 Payments
All payments under the contract except refund of retention moneys shall be net of
retention money as specified in the contract and taxes applicable at the time of
payment. All payments shall be made by crossed cheques.

Accounting Entries
Accounting for Advance for Mobilization
Dr. Mobilization Advance Relevant code
Accounting for Capital Work In Progress
Dr. Capital Work In Progress Relevant code
Cr. Payable to Contractor Relevant code
Cr. Retention Money payable Relevant code
Cr. Tax deducted at source payable Relevant code
Cr. Mobilization Advance Relevant code
Accounting for Payment to Contractor/supplier
Dr. Payable to Contractor Relevant code
13.8 CONTRACTORS LEDGER FOR WORKS
The objective is to establish fundamental guidelines for compliance with the

provisions of approved accounting standards as applicable in Pakistan for properly
accounting and reporting liabilities other than accounts payables. Major focus is
the achievement of the following:
i. All liabilities are measured and recorded as accurately as possible, given the
circumstances under which the liability was created.
ii. Liabilities recorded in the financial statements reflect invoices received and
accruals for any costs incurred.
iii. Accounts are maintained on an accrual basis. Costs and revenues are
identified and recorded in the period in which they are incurred, even if
receipt of the revenue or payment for the expenditure occurs in a
subsequent accounting period. A balance is maintained between the effort
required to measure accrued costs precisely and the added value of such
precision.
iv. A security deposit received in cash from a contractor will be credited to
Contractors Cash Deposit Account, and debited to the bank account in
which the cash is lodged. Where a deposit is received otherwise than in cash
the face value of the securities lodged should be certified to Contractors
Paper Deposit Received Account and debited to Contractors Paper
Securities Held (Contra) Account. No entries will be passed in the books of
account for a guarantee received from a bank on behalf of a contractor, but
particulars of such a document will be recorded in a register of guarantee
and the document itself placed in a safe at the Project Office or in safe
custody with a bank other than that which have given the guarantee.

v. When a deposit originally received in cash is refunded, the bank account

from which repayment is made will be credited and Contractors Cash
Deposit Account debited. If for any reason the whole or a part of the cash
deposit is utilized in settling off a claim by the Authority against the
contractor, a Journal entry will be passed through the books transferring
amount from Contractors Cash Deposit Account to the account to which
credit is to be given in accordance with the agreement/decision of the
Authority.
vi. On returning a deposit received otherwise than in cash the face value of the
security originally lodged and now returned will be entered in the Security
Deposit Register. The return of a guarantee documents will require only an
endorsement in the register of guarantees. If on default the guarantee is
encashed by the Authority then on payment received cash or bank will be
debited and the work, materials or the other account concerned will be
credited, and the facts, recorded in the register of guarantees.
vii. An advance given to a contractor in the form of a direct payment to the
supplier of equipment will be debited to his personal account in Advance for
Equipment Account. An advance for purchase of specific materials will be
debited to his personal account in Advance for Materials Account. The value
of any materials issued to a Contractor will be debited to the personal
account of the Contractor in Material Issued Accounts. All other advances
whether in cash or in the form of services rendered, e.g. rental for
equipment used, charge for supply of power and similar other services will
be debited to an Other Advance Account. If the same contractor has more
than one contract in progress at the same time, it may be advisable to add
the contract number to the name of the account.
viii. The gross amount of a contractors bill will be worked out as per BOQ of the
contract agreement for the work done. In case some tax or other
compensation relating to work in progress bill is to be reimbursed to the
contractor as per provisions of the contract agreement, the contractor will
submit a separate supplementary invoice on this account. The Engineers or
the Employer are not authorised to add any amount on account of tax or
other charges on the bill of the contractor.
ix. On a contractors bill being finally approved for payment an entry will be
passed through Journal debiting the gross amount of the bill to the
appropriate works in progress or other accounts and crediting to the various
accounts of that particular contractor for deductions to be made from the
gross amount of this bill. The net amount payable, being the difference
between the gross amount and the adjustment/deductions on all advances
will be credited to a Personal Account.
x. Withholding tax shall be deducted from the gross amount of the
contractors bills at the prevailing tax rates, unless contractor provides Tax
Exemption certificate issued by the relevant tax authority for the related
period.
xi. The net amount paid to contractor against his progress or final bill will be
debited to his Personal Account.

xii. All transactions covering advances, issue of materials, payment of bills and
retention money will be recorded in Contractors Control Account in the
General Ledger. Detailed accounting of these transactions will be in a
subsidiary ledger, in which a separate account will be opened for each
contract or work order. The subsidiary ledger (Annexure-5) will provide
the name of the contractor, the number of the contract, description of
work and location, job number, dates of commencement and completion of
contract, and security deposits held by the Authority and will have columns
for: Date; Particulars; Folio; Total; Details column for Material Issued; Cash
and other Advances; Personal Account; Retentions and Remarks.
xiii. The Total column and each of the Details columns will have separate sub-
columns for debit and credit items.
xiv. Any adjustment between Contractors Control Account and another account
in the General Ledger between one contractors account and another
contractors account in the subsidiary Ledger or between one Details
column and another Details column in the same contracts account should
never be recorded in the ledger without passing a Journal entry. In no case
should a direct transfer be made from one account to another account or
from one column to another column in the same account.
xv. On the completion of a project, when the final costs both direct and
indirect have been ascertained, the indirect charges will be apportioned
over the facilities in an equitable basis.
13.9 ACCOUNTING FOR PAYROLL EXPENSES
The responsible official for ensuring proper accounting of payroll expenditure shall
be the respective DDO/PD.
The respective DDO/PD shall ensure that all payroll expenses are reasonable,
allowable and allocable to budgetary units.
The important procedures related to the payroll function at WAPDA as laid in the
manual shall be closely adhered to.
13.9.2 Payroll Preparation
The payroll process begins from Administration (HR) Department which hires new
staff, adjust salaries and wages, establish payroll deductions, promote, transfer &
terminate employees through retirement or otherwise. The Admin Department is also
repository for all employment history records. A register shall be maintained for
recording attendance, absence & tardiness on a daily basis as a timekeeping. At the
end of each month the Budget and Accounts Office shall prepare payroll based on data
obtained from the Admin department and timekeeping register.

13.9.3 Payroll Administration
WAPDA shall operate monthly payroll software. A personal file shall be established
and maintained for all employees with current documentation by the Admin
Department.
The following forms, documents and information shall be obtained and included in
the personal files of all new employees:
i. WAPDA employment application.
ii. Applicant references (work & personal).
iii. Interview questions and notes.
iv. Starting date and scheduled hours.
v. Job title and starting salary.
vi. Authorization for direct deposit of pay-cheque.
vii. Signed completed processing form.
viii. The salary payment shall be authorized and approved by the respective GM
Finance.
13.9.4 Changes in Payroll Data
The following payroll procedures shall be followed to the greatest extent possible:
i. Changes to payroll master file data (rates of pay, adding employees,
deleting employees, etc.) shall be performed by someone other than the
person who processes payroll.
ii. Changes are documented in writing and review of all changes to master
payroll data shall be made by an independent person authorized by the
DDO.
iii. Payroll shall be processed by an individual who does not have the
permission to make journal entries in the general ledger.
iv. Timely review of payroll shall be made by someone independent from
payroll processing and employee master file data input.
v. All of the following changes in payroll data shall be authorized in writing:
a) New hires
b) Terminations
c) Changes in salaries and pay rates
d) Voluntary payroll deductions
e) Changes in income tax withholding status
f) Court-ordered payroll deductions
vi. Periodically, adjustments shall be made to an employees payroll for various
reasons (salary and / or position changes during a pay period, employees

starting or terminating in the middle of the pay period, etc.).

vii. Documentation of all changes in payroll data shall be maintained in each
employees personal file kept in the Admin Department. A copy of the
employee processing form and documentation showing changes to an
employees payroll record shall be forwarded and kept within the Budget
and Accounts Offices monthly payroll maintenance records.
13.9.5 Payroll Deductions and Reductions
The Budget and Accounts Section shall process mandatory deductions from an
employees pay-cheque in compliance with governmental regulations, and
voluntary deductions within its scope in accordance with employees demand.
Voluntary deductions shall be made upon evidence of employees authorization for
such deductions. The Budget and Accounts Section shall ensure the timely
disbursement of amounts withheld from employees pay-cheques to government in
accordance with statutory regulations.
Voluntary payroll deductions shall be authorized in writing by the individual
employee. Submission to the Admin Department shall be the responsibility of the
individual employee for voluntary deductions. The individual employee should
check his or her payroll payments to verify such deductions have been
implemented and if the deductions have not been implemented, they should
immediately notify the Admin Department.
13.9.6 Payroll Taxes
The Budget and Accounts Section shall be responsible for ensuring all required tax
forms have been properly completed and submitted, and that all required taxes
have been withheld and paid.
13.9.7 Review of Payroll
Upon production of all payroll reports and cheques, DDO shall review payroll prior
to its distribution to employees and shall sign the payroll register, indicating
approval of the payroll.
13.9.8 Special Payments To Employees
All special payments shall be approved by the respective DDO in advance. Any
payment request, which shall not have the appropriate approval, shall be returned
to the department.
Departments considering making any special payments to employees other than
those specifically covered under benefit program, should contact the Budget and
Accounts Section before making the payment to determine if the payment will be
considered taxable income and / or are subject to withholding tax.
13.9.9 Payment Through Bank
Making payment to employees through bank transfer shall comprise of the following
steps:

i. The Budget and Accounts Section shall prepare monthly salary sheet with
gross pay, and deductions; signed by the respective DDO, and B & AO.
ii. The Budget and Accounts Section shall give the bank letter for transfer of
funds to concerned Manager Finance.
iii. The Budget and Accounts Section shall send letter to bank with particulars
such as name, bank account number, net amount of pay, alongwith a
cheque, directing the bank to transfer funds from WAPDA account.
iv. A pay slip shall be prepared for all employees with the information; bank of
deposit, account number, gross pay for the month, salary deductions
(provident fund, income taxes, house rent, license fee, water, electricity,
staff club, advances, loan against provident fund, interest, and net pay).
13.9.10 Filing of Tax Returns
The respective B&AO/DDO shall file the following tax statements for all deductions
from salaries of employees, and tax deducted from payments made to contractors
and suppliers:
i. Monthly withholding tax statement
ii. Annual withholding tax Statement
The tax deducted from salaries of staff or the payments to contractors and suppliers
shall be deposited in the Government treasury within seven days of being withheld.
The respective B&AO/DDO shall issue the tax deduction certificates to the employees
on annual basis and to others within one month of the deduction.
13.10 RECONCILIATIONS
Monthly reconciliation shall be prepared using the following procedure:

i. The amount paid to employees who left employment during the month shall
be deducted from the amount paid to employees during the last month and
amount paid to new employees hired during the month shall be added.
ii. The amount of pay advances and loans secured by the provident fund shall
be reconciled with the general ledger account on a monthly basis.
Accounting Entries:
When Salary expense is accrued
Dr. Salaries Relevant Code
Cr. Salaries payable Relevant Code
Cr. Income Tax Deducted at Source Relevant Code
Cr. Provident Fund Payable Relevant Code
When Salary is paid


Dr. Salaries payable Relevant Code

Cr. Cash / Bank Relevant Code
When contribution is accrued
Dr. Contribution Relevant Code
Cr. Contribution payable Relevant Code
When contribution is paid
Dr. Contribution payable Relevant Code
Other Employees Benefits
When other employee benefits are accrued
Dr. Other Employee benefits Relevant Code
Cr. G. Insurance payable Relevant Code
Cr. Medical Fund payable Relevant Code
Cr. B. Fund payable Relevant Code
When other employee benefits are paid
Dr. G. Insurance payable Relevant Code
Dr. Medical Fund payable Relevant Code
Dr. B. Fund payable Relevant Code
13.11 ESTABLISHMENT RETURN
The concerned DDO/PD shall generate and submit to the concerned General
Manager Finance the establishment returns containing the details of employees
their basic salaries date of joining, date of retirement etc. The purpose of the
returns is to make provisions for pension and other allowances payable to the
retiring employees and arrange for actuarial valuations and calculations for pension
of the existing staff. The reports for actuarial purpose shall provide :
i. Report containing details of the employees engaged at the unit/project who
shall be retiring during the next financial year.
ii. Report on the employees who shall continue in service during the next
financial year.
iii. Report on the replacement plan against the employees retiring as per report
at 1 above.

13.12 ACCRUAL OF OTHER EXPENSES
The objective is to establish practices consistent and in compliance with approved

accounting standards as applicable in Pakistan ensuring that costs are properly
authorized and approved and allocated to accounts in a manner that is an accurate
reflection of the expenses incurred during the particular financial year. These
expenses would normally accrue from the facility having received during the year
but the invoice being received in the subsequent period.
The Budget and Accounts officer/DDO shall be responsible for ensuring that all
expenses relating to the financial year are duly accounted for in that particular
year even if the payments are made in the subsequent years. These expenses
would include telephone bills, electricity bills, audit fees, travelling claims,
markup payable on loans and other similar expenses.
13.12.2 Methods for Determining Amounts
The amount of accrued expenses shall be determined using the methods of specific
identification. The methods used to arrive at the best estimate are consistently
applied and based on supportable documentation. Expenses are recorded using
accrual basis and by following matching and prudence concept of accounting. The
methodology, source of information, computations, records of discussion, and
assumptions shall be documented and maintained for future reference, oversight,
or audits.
13.12.3 Reimbursement
The employees shall be reimbursed with the actual amount of expenses incurred
necessarily in the performance of the duties of their employment. In general,
reimbursement will be made only on the production of receipts or invoices.
The B&AO shall ensure that all payments under contingent expenditures are duly
supported, are for the project, have been duly approved by the competent
authority before being incurred and have been recorded accordingly.
In case of review of the expenditure of the contingent establishment the following
shall be ensured:
i. Pay allowed to contingent establishment does not exceed that sanctioned
for regular establishment of the same category.
ii. Budget allocation in lump sum or otherwise exists under the Sub-head
'contingencies'.
Accounting Entries
1. When expenses are accrued
Dr. Expense Relevant code
Cr. Accrued Expense Relevant code

2. When Expense is paid

Dr. Accrued Expense Relevant code

14 PRE AUDIT
14.1 GENERAL
The objective of the policy is to establish standards for pre-audit of all payments
being processed by the Budget and Accounts Department at all
projects/formations/units. The purpose of pre-audit is to ensure that all payments
are in accordance with the laid rules and procedures defined by WAPDA. The pre-
audit will ensure that:
i. Proper authorizations for the expenditure are in place.
ii. The supporting documents are attached.
iii. The invoices or other document has been verified by the concerned
department.
iv. Proper budget allocations exist for the expenditure.
14.2 RESPONSIBILITY
The Accounts Staff of WAPDA in accordance with the Authoritys instructions

contained in General Manager Finance (Coordination) letter
No.GMFP/DAC/Consold/Con/Pre-audit/566 dated February 11, 1989 shall be
responsible for conducting the Pre-Audit in accordance with the rules and
procedures defined in this section of the manual.
Further as already resolved by the Authority vide resolution number 396 dated June
03, 1978 all matters not covered by the Rules framed by the Authority, or where
the Authoritys rules are silent, the Fundamental Rules or Supplementary Rules
passed by the Federal Government shall be applicable. All accounts staff
conducting pre-audit shall take cognizance of this resolution.
All the projects irrespective of financial limit which are subject to pre-audit by
WAPDA Audit Staff will also be subject to regular audit by the Internal Audit
Division according to their procedure.
The term Auditor where-ever appearing in these procedure/guideline means any
member of Accounts Staff deputed to carry out the pre-audit work and Audit Office
means the office of the B &AO/Sr. B & AO or Director (B&A)/ Manager Finance as
the case may be.
14.3 PROCEDURE FOR PRE-AUDIT
1. The project authorities will make available to the Accounts Staff deputed for
pre-audit two copies of each agreement with the consultants and contractors
for each project. The Accounts Office will keep book of Financial Powers upto
date in order to see that sanctions are within the competency of the
authorities according to such sanctions.
2. The project authorities/Accounting Head of the Project will make available to
the Accounts staff deputed for pre-audit all orders and sanctions issued by
the authority/Government for their study, scrutiny and references They will

follow the following procedure for the audit of bills of Suppliers, Contractors
and establishment: etc.
14.4 PRE-AUDIT OF WORKS BILLS
Detail instructions for the pre-audit of Contractors/Suppliers bills, have been given
in the WAPDA Accounting Manual and CPWA Code. These instructions should be
strictly followed by the Auditors for the pre-audit of such bills. For general
guidance the following instructions are, however, laid down to supplement the
orders contained in other codes, manuals etc.
14.4.1 Contractors Bills for Works

The following are the main checks to be exercised in respect of the works bills:-
i. In order to avoid piecemeal objections by Audit on the bills of
Contractors/Suppliers the proforma introduced by the Authority called as
Documentation and Check memorandum should invariably be attached,
duly completed in all respect with the bills.
ii. It should be seen that the requisite Administrative approval has been
obtained from the competent authority, appropriate in each case.
iii. It should be seen that the bills have been prepared on the prescribed form.
iv. It should be seen that a detailed estimate for the work has been sanctioned
by the competent authority and necessary budget provision for the same
exists.
v. The bill should be checked with reference to the relevant
agreement/contract/work order issued by the competent authority.
vi. The quantities billed for should be checked with reference to the quantities
shown in the Measurement Book. The calculations and totals worked out in
the Measurement Book should be checked arithmetically hundred per cent
by the Auditor, 25% by the Assistant Budget & Accounts Officer and 10% by
the Budget & Accounts Officer. It should also be seen that there is an
indication in the Measurement Book of the prescribed checks by SDOs/XENs
having been duly carried out.
vii. If any material has been issued to the Contractor for use on the work as per
agreement, it should be seen that necessary deduction on this account has
been made from the bill at the correct rate and relevant indents/store
requisitions accompany the bill. The items of material, issue rates of which
are known to be appreciably below the market rate should receive special
attention so that practices likely to put the Authority to loss may be
challenged. It should also be seen that deduction on account of security
deposit has been made from the running bills in accordance with the
agreement.
viii. Rates of schedule items should be checked with reference to the relevant
schedules of rates. In case of non-schedule items it should be seen that the
non-schedule rates have been approved by the competent authority and are
supported by the detailed analysis thereof.

ix. In case of secured advances being allowed according to the provision of

contract/agreement to the Contractor against security of material, it should
be seen:
a) That amount of secured advances does not exceed 75% of the value of
material of imperishable nature brought at the site of works by the
Contractor.
b) That an indenture in proper form has been drawn up with the Contractor
under which the Authority secures, a lien on that material and is
safeguarded against losses due to the Contractor postponing the
execution of the work or to the shortage or misuse of material and
against the expense on their proper watch and safe custody.
c) That a certificate has been given by the competent Executive Officer
that the quantity of material against which the advance is being made,
has actually been brought to the site, that the Contractor has not
previously received any advance on its security and that the material is
required by the Contractor for use on items of works for which rates for
finished work have been agreed upon.
d) Recovery of such advances should not be postponed until the whole of
the work entrusted to the Contactor is completed. Recovery should be
made from his bills for work done as the materials are used. The
necessary deductions be made, whenever, the items of work in which
they are used, are billed for.
x. When the bill is on running account, it should be compared with the
previous bill in order to verify the correctness of the memorandum of
payments prepared on the bill. At the same time it should be seen that
there is a certificate recorded by the Assistant Budget & Accounts
Officer/Budget & Accounts Officer as the case may be to the effect that
the Contractors ledger has been scrutinized and the recoveries outstanding
against contractor upto the date of submission of the bill have been
effected.
xi. In addition to the above checks, the final bills should be checked to see:-
a) That the contractors ledger in original duly balanced and signed by the
DDO/Project Director, has been sent alongwith the bills.
b) That the work has been completed within the stipulated period as
specified in the Agreement Contract. If the same has not been
completed within the stipulated period, it should be seen whether
penalty has been imposed on the contractor in accordance with the
terms of the contract agreement.
c) That a certificate of the appropriate Executive Officer regarding
satisfactory completion of work in accordance with the approved design
and specifications are forthcoming with the bill..
d) That a certification to the effect that nothing is outstanding against the
Contractor in respect of the work concerned accompanies the final bill.
e) That a No Claim certificate from the contractor is given on the bill.

14.4.2 Suppliers Bill

The bill should be checked to see that:-
i. the same is accompanied by the following documents:
a) Purchase/Supply order issued by the competent authority.
b) Relevant page of the Stock Measurement Book.
c) Store balance report from the concerned formation stores.
ii. it has been certified by the officer making the local purchase that the same
has been made for incorporation in a duly sanctioned work for immediate use.
iii. the quantities and rates of the items shown in the bill agree with those shown
in the relevant Purchase order and page of the Stock Measurement Book.
iv. other conditions such as terms of the delivery in the purchase order have
been fulfilled.
v. monetary limits laid down for individual purchases and for purchased during
the financial year, have not been exceeded.
vi. the supplies have been made within the stipulated delivery period and in case
of delayed supply, penalty has been imposed on the supplier in accordance
with the terms of the Purchase Order.
vii. it has been certified by the appropriate Executive Officer that the items
purchased locally are not covered by the Rate Contracts concluded by the
competent Authority.
viii. items are according to specification.
14.4.3 Bills for Refund of Security Deposit of Contractors for Works:

These bills should be checked to see:-
i. That the credit for the amount for which refund is being claimed exists under
Deposit in the contractor ledger.
ii. That the claimants identity and title to refund are certified by the Divisional
Officer and a written request from the Contractor for the refund of Security
deposit accompanies the refund bill.
iii. That refund has been claimed after the expiry of the period stipulated in the
Agreement/Contract, and after the final bill of the Contractor has been
prepared and passed for payment.
iv. That certificate has been given by the Divisional Officer/Engineer concerned
that nothing is outstanding against the Contractor.
v. At the time of pre-audit of a refund bill a reference should be made against
the relevant credit entry in the schedule of deposit/Account head in order to
make the entertainment of a double or erroneous claim impossible.
vi. It should be clearly understood by the Project Director and Budget & Accounts
Officer that while submitting bills for pre-audit to the appropriate Accounts
Officer for all the items dealt within above paras, they are fully responsible

for ensuring that all the checks prescribed in the Codes have been carried out
by them.
14.5 CONSULTANTS EXPENDITURE
1. On receipt of Consultants Rupees/Foreign currency invoices the Project

Director/Budget & Accounts Officer or Sr. Budget and Accounts Officer will
finalize the check of these invoices within a week or as per the provision of
contract and forward the same for audit. Foreign currency invoices will be
accompanied by the Photostat copies of the vouchers receipt from the
Consultants. The Rupee invoices will be accompanied by original vouchers. Sr.
Budget & Accounts officer/Audit office will complete the checks within seven
days of their receipts and then return them with their observations to the
Project Director/Sr. Budget & Accounts Officer or Budget & Accounts Officer
concerned.
2. One copy of the Audit observation in respect of the rupees/foreign currency
invoice, will be passed on by the Sr. Budget and Accounts Officer/Budget &
Accounts Officer to the Consulting Engineer. The latter will furnish his reply
to the Sr. Budget & Accounts Officer or Budget & Accounts Officer/ Project
Director with in a period of fortnight of the receipt of these audit observation
by him. Project Director/ Sr. Budget & Accounts Officer or Budget & Accounts
Officer will examine consulting engineers reply and furnish his comments on
the audit observation on the basis of the information received from the
consulting Engineers to the Accounts Staff deputed for audit. This reply must
be issued as early as possible but in no case later than a period of two months
from the date of original receipt of audit observations in the Sr. Budget &
Accounts Officer/ Budget & Accounts Officers office. It would be ensured
that any disallowance pointed out/objected by the audit office, acceptable
to the project authorities are to be adjusted in the subsequent months
invoice before applying for reimbursement. Further observations, if any, on
Project Directors comments will be discussed in the monthly meeting in
which Consultants Representative will be invited to attend and resolve such
cases as far as possible. Any further deductions required to be made from the
invoice as a result of these discussion along with the next months invoices
will be advised to the Project Director/ Sr. Budget & Accounts Officer or
Budget & Accounts Officer. Unresolved audit observation will be referred by
the Project Director with his detailed comments to the concerned General
Manager and Accounts Officer representative of the respective General
Manager Finance. The latter will if not satisfied with the explanation, bring
up the audit observation to the notice of the Authority
14.6 MAIN CONTRACTORS EXPENDITURE
1. On the day Project Director, receives copies of the Contractors monthly

invoices, he will send one copy of the invoices to the Accounts Staff deputed
to pre-audit for scrutiny. Within three weeks of the receipt thereof they will
send observations, if any, in writing to the Sr. Budget & Accounts Officer, or
the Budget & Accounts Officer of the Project. The latter will forward the
observations to the Project Consultant immediately. To the extent the audit
observations are acceptable to the Engineering Consultant, the latter will

make the required adjustment in the contractors invoice in hand. In case the
Engineering Consultant is not agreeable to the observation made, he will
within a period of one month from their receipt, communicate his reasons for
not accepting the audit observations to the Project Director who will in turn
supply a copy of these together with his remarks, if any, to the General
Manger Finance concerned for audit within a week. If the representative of
General Manager Finance concerned feels that the explanations given by the
Engineering Consultant are not to their satisfaction, they may discuss the
same in the monthly meeting to be held on 10th of each month, with the
Project Director, in which the Consulting Engineers representative may also
be invited to attend. Audit observations should be resolved as far as possible
in these meetings. Unresolved observations will be referred by the Project
Director with his detailed comments to the Chief Engineer/General Manager
and by the accounts representative to the General Manager Finance. The
latter will, if not satisfied with the explanation, bring up the audit
observation at the monthly meeting with the General Manager in charge of
the Project.
2. If the replies to the audit observations are not received within five weeks, it
will be presumed that the audit observations have been admitted and
necessary compliance thereof will become imperative
14.7 RE- IMBURSEMENT APPLICATIONS
To avoid delay in obtaining reimbursement from the Loan giving agencies

immediately at the end of month the Sr. Budget & Accounts Officer or Budget &
Accounts officer concerned will prepare the monthly re-imbursement application
according to donor agency requirement. He will then submit the monthly
reimbursement application and the monthly trial balance alongwith the supporting
records, to the representative of General Manager Finance concerned for audit.
The amount disallowed by the loan giving agencies in respect of each
reimbursement application alongwith reasons of rejection will also be made
available to the representative of the General Manger Finance Concerned entrusted
with audit.
14.8 RECOUPMENT OF IMPREST ACCOUNT
The application for the recoupment of the imprest should be supported with the
relevant cash-book page alongwith detailed classification for charging the accounts
and the original receipt/supporting vouchers. The detailed audit of supporting
vouchers shall be carried out by the Sr. Budget & Accounts Officer/ Budget &
Accounts Officer. The irregular payment pointed out by the Sr. Budget & Accounts
Officer/Budget & Accounts Officer, should be booked under a separate head Item
awaiting adjustment in imprest Accounts as required under WAPDA Accounting
Manual which should be cleared either by the removal of the objection or by the
amount being made good by the imprest holder as early as possible and in any case
before the finalization of accounts for the financial year.

14.9 PRE- AUDIT OF ESTABLISHMENT BILLS
14.9.1 Pay and Allowances of Regular Establishment

1. Pay and allowances of WAPDA employees, if not charged directly to works, as
well as all personal advances sanctioned by competent authority, are drawn
on bills in forms and in accordance with the procedure prescribed by Water
and Power Development Authority. The sanction of competent authority to
personal advances, if obtained in the form of countersignature on the bill
itself, is also in order.
2. WAPDA officers draw their own bills, but the claims of establishment are
prepared separately by heads of offices under whom they are employed, and
the latter also makes proper arrangements for disbursing the amount so
drawn. Separate establishment bills are prepared by the DDO for each of the
establishment specified below:
a) One for establishment working in each section of the office.
b) One for establishment working in each Sub-Division.
c) One for establishment working in each Sub-Office etc.
3. To enable the Accounts Office to exercise proper check on the pay bills,
copies of all orders regarding appointments, promotions, resignations,
termination, transfers leave and changes in rates of pay and grades, etc and
authorized deduction are communicated to them by the sanctioning
authorities.
4. Orders sanctioning the creation or abolition or continuation of
appointments/posts are also communicated to them.
5. In case of transfer of officers, their charge reports are also forwarded to
accounts office which is responsible to issue the pay slip of the officer.
6. The pay and allowances of subordinates employed at remote places are
usually remitted to them by postal money order, Bank Drafts at WAPDA
expenses.
7. The deductions made from pay for the benefit of various funds, such as
insurance, provident fund, welfare/compassionate fund, employees
advances, taxs etc, are remitted by the drawing and disbursing officer to the
respective funds/beneficiaries promptly.
8. When pay is disbursed in cash to employees, officer or his representative at
Sub Office, Sub Division or Division/Project witnesses the disbursement of
pay. The pay bill is signed by all employees over the Revenue Stamps of
proper denomination.
9. In respect of WAPDA Officers, a Salary Audit Register is maintained in which
details of pay slip are entered. Pay and allowances claimed and deductions
made during each month, are also entered therein. The Salary Audit Registers
maintained by Accounts Office or Accounts Section.
10. When an employee is transferred from the audit control of one accounts
office to another, the outstanding balance of any advance/loan is passed on
to his pay allowance office through his Last Pay Certificate. This advance/

loan is entered in the Advance Register of the new accounts office to watch
recovery of monthly installments through the pay bill of the individual
concerned. The credit of the amount recovered is passed on to the Central
Accounts through Bank Drafts. Similarly new advances/loans paid to the
employees by Central Accounts are also entered in the Advances Register for
watching recovery and passing on credits to the Central Accounts Office
concerned.
14.9.2 Audit of Pay Bills of Officers and Regular Establishment

While auditing pay bills of officers and staff it will be seen that:-
i. The appointment is covered by the sanction accorded by the competent
authority. This sanction is issued by the competent authority for each
financial year, separately for each office, showing the details of staff
sanctioned for that office.
ii. The individual is legally entitled to the pay and allowances drawn for him.
iii. In case of first appointment the employees is not less than 18 years of age
and not more than 25 years of age except where the relaxation has been
granted by the competent authority, and the employee has produced the
following certificate:
a) A Certificate of medical fitness form the WAPDA/Government Medical
Officer, and
b) Character certificate, academic certificates, experience certificates and
other certificates required by his letter of appointment.
iv. Except in case of first appointment every first payment to an individual
whether on account of pay and allowances or leave salary, is supported by a
last pay certificate in original.
v. During joining time the employees draws the pay which he would have
drawn if he had not been transferred or the pay which he will draw on
taking over the charge of his new post, whichever is less.
vi. The annual increment in the Basic Pay Scales of pay will accrue on the first
day of the December following the completion of at least 6 months of such
service at the relevant stage in the scale as counts for increment under
ordinary rules.
vii. All deduction including installments of long term advances and income tax
have been correctly made and also paid to respective funds/beneficiaries;
and the recoveries noted in the Register of Miscellaneous Recoveries have
been made in full from the individuals concerned.
viii. Service books and leave accounts for the establishment have been
maintained as required under rules and that they are posted up to date.
ix. An employee dismissed or removed from service is not paid any pay and
allowances from the date in which he is dismissed or removed from service.
x. An employee under suspension is paid during suspension period full benefits
as he was being paid on duty or as may be ordered specifically by the
competent authority.

xi. When an employee is transferred from a higher to lower grade or post, as a

penalty, he will draw pay which the authority ordering his transfer has
allowed him, which should not exceed the maximum of the lower grade or
post.
xii. When an employee is, on account of misconduct or inefficiency, reduced to
a lower grade or post, or to a lower stage in his time scale, the authority
ordering such reduction shall state the period for which it shall be effective
and whether, on restoration, it shall operate to postpone future increments
and if so to what extent.
xiii. In case of promotion from a lower to a higher post, one premature
increment is allowed in the higher Basic Scale if the pay increase on
promotion under the normal rules is equal to, or less than, one full
increment.
xiv. The pay of person appointed to posts in higher grade before they have
completed the prescribed length of service for the relevant grade, is fixed
at the minimum of the scale of the post but for the purpose of drawl of
increments service in that scale shall count only from the date of
completion of the prescribed length of service.
xv. The salary slip at the time of first appointment, promotions, demotions,
appointments against posts carrying or not carrying special type of
allowance or additional pay is issued by the General Manager Finance
concerned. Revised salary slip on account of normal annual increment is
issued by the Budget & Accounts Officer.
xvi. The various allowances being paid to WAPDA employees are the same as laid
down in the Basic Pay Scales of Pay and Allowances introduced by the
Authority and as amended from time to time.
xvii. Government Servants in foreign service, i.e. those who are on deputation
with WAPDA, will receive the pay and allowances which have been settled
in advance in consultation with the foreign employers and Government
Servants, and the basic conditions for such settlement are that no
Government Servant shall be permitted to receive any remuneration or
enjoy any concession which is not specially settled, and that if the
sanctioning order is silent as to any particular benefit, it must be assumed
that it shall not be enjoyed. The deputationist is, therefore, not entitled to
any increase in pay, reward or remuneration not covered by the terms of his
transfer to WAPDA unless it is specially sanctioned subsequently by the
authority competent to sanction his transfer to WAPDA.
xviii. In case of a retired Government Servant re-employed in WAPDA his pay has
been fixed with the following principles:
a) When the new post carries a fixed pay, he will be allowed the pay of
that post less pension.
b) When a new post carries Basic Scale of Pay:
1. If the substantive pay last drawn by the officer before retirement
was less than the minimum of the scale of the new post, he will be
allowed the minimum of the scale less pension,

2. If the substantive pay last drawn was more than the minimum of the
scale of the new post, his pay will be fixed at the stage in the scale
corresponding to the pay last drawn or if there will be no such stage,
at the next lower in the scale. From the pay so fixed, the amount of
the pension shall be deducted.
3. Where the substantive pay drawn immediately before retirement
was more than the maximum of the scale of the posts in which the
Officer is re-employed, his pay may be fixed at the minimum of the
scale of the post in which he is re-employed and he shall be allowed
to draw his pension in addition to the pay so fixed subject to the
condition that the initial pay fixed plus the amount of pension does
not exceed the substantive pay drawn by him immediately before
retirement. Once the pay is so fixed, he shall be entitled to draw
annual increment in the scale of the post provided that the amount
of pay (including increments) plus pension does not, at any, stage
exceed the substantive pay drawn before retirement.
c) The re-employed person shall earn increments in all cases where pay has
been fixed in a scale at a stage lower than the maximum.
d) In case the re-employed pensioner is promoted to a higher post, his pay
shall be fixed in such a manner as if he was a serving officer with the
difference that from the pay so determined the pension will be
deducted.
e) In a case where officiating pay is higher than the substantive pay was
drawn for a continuous period of 3 years or more immediately before
retirement, that may be treated as substantive pay for the purpose of
these orders.
f) The pay of the retired Military personnel re-employed in WAPDA will
also be fixed in accordance with the above principles. In their case
substantive pay shall also include the following elements, provided that
they were drawing before retirement/release/leave pending retirement
for a continuous period of 3 years or more:
1. Command / staff / charge pay
2. Instructional pay
3. Qualification pay
4. Disturbance pay
g) The word Pension means pension before commutation and / or
surrender, (Authoritys Office Order No. FO. B&C/2-III-Vol-II/312-99
dated 9.1.1974)
xix. The pay of the retired officer of armed forces up to the rank of Lt. Col/Col
re-employed on contract against equivalent post may be fixed in terms of
Para-1(a) of GOP Establishment Divisions O.M dated 21.08.2001 OR in terms
of clarification dated 05.11.2008 referred to above, whichever is more
beneficial. The option of the officers concerned may be obtained and same
once exercised shall be final. (Authoritys Office orders No. FO(B&F)/2-
111/Vol-14/4519-22 dated 17.06.2009).

xx. Increase in pension allowed by the Federal Government to the pensioners

during their re-employment/contract period will be admissible to them. The
policy instructions will be effective from 1st December, 2011. No arrears
prior to 1st December, 2011 will be admissible (Authoritys Office order No.
FO(B&F)/37-9/Vol-78/8250-69 dated 18.07.2012).
xxi. In case of retired civil servant who is re-employed with WAPDA beyond the
age of 60 years, he may, with effect from the date of appointment or of
attaining the age of 60 years, as the case may be, allowed to draw his
pension in addition to the pay of the post, (Authoritys Office Order No.
SO(E-II)/1(8-B)Admn/11248-52 dated 24.3.1976.
xxii. With effect from 1.1.1984 the retired defence service personnel below
commissioned rank re-employed in civil post will receive full military
pension in addition to civil pay. On appointment their pay will be fixed at
the initial stage.
xxiii. In case of retired Government servants re-employed with WAPDA, the pay
or basic pay on which the allowances are to be calculated will, in addition
to actual pay drawn, also include the amount of gross pension which had
been taken into account for the purpose of determination of pay during the
period of re-employment (Authoritys Office Order No. F.O. BF&C/2-III/Vol-
III/5073-5172, dated 27.08.1977
xxiv. The office orders pertaining to the fixation of pay in respect of re-employed
Military pensioners / Civilian pensioners will be deemed quoted in the
preceding paras to have been amended/revised in light of the notification
/instruction issued by the Authority on the subject from time to time.
xxv. Conveyance Allowance, Motor Cycle Maintenance Allowance and Car
Maintenance are admissible to an employee while he is on tour (Authoritys
Office Order No. F.O. F&F/10-126/A/Vol-XIV/580-630, dated 5.7.1978),
xxvi. House rent at the rate of 5% of the emoluments of an employee is recovered
if residential WAPDA accommodation has been provided to the employee.
These orders are not applicable in cases where house rent was not
recoverable under orders in force prior to 1.5.1977 or may not be
recoverable under any subsequent orders,
xxvii. Time barred claims are not passed unless sanctioned by the authority
competent to investigate time barred claim. G.Ms/G.M. Finance, Dy. G.M.
Finance, CEs and Chief Auditor have been given full powers in respect of
claims less than 3 years old, for employees to whom they are competent to
employ, (A claim is time barred if it is not preferred within 6 months at pre-
audit counter of its becoming due. The six months time limit is reckoned
from the date the claim becomes due for payment),
xxviii. Water charges at prescribed rates have been recovered from occupants of
bungalow/quarters in WAPDA Colonies at places where water is supplied by
WAPDA.
xxix. To ensure the recovery of water charges, Register of Buildings and Register
of Rent should be scrutinized.

xxx. When accommodation has been hired for office-cum-residential purpose it

will be seen that:
a) The rent apportioned for office bears a reasonable and equitable
proportion to the accommodation used by office,
b) Sanction of higher authority for distribution of total rent between the
residential portion in occupation of the officer and the portion
occupied by his office has been obtained.
c) Electricity and water charges for the rented building are also
distributed between the officer and WAPDA on reasonable fair basis.
xxxi. Advances register has been maintained and advances/loans recovered
through monthly pay bills have been remitted to Central Accounts through
Bank Drafts in case of Water Wing. In case of Power and Coordination wings
the advance register is maintained at the respective formation and the loan
is adjusted and recorded at the respective formation.
xxxii. After liquidation of advance /loan the amount of interest is calculated /
ascertained from the Central Accounts and recovered from the employee.
14.10 WORK CHARGED ESTABLISHMENT
14.10.1 General
1. The term Work Charged Establishment includes such establishment as is
employed upon the actual execution as distinct from the general supervision
of departmental labour, stores and machinery in connection with such a work
or sub-work, provided that as exception to the above, mistries and mates
employed in the interest of the Authority on the technical supervision of
contractors work and khalasis attached to subordinates for assisting them on
works will be treated as work charged establishment. When employees borne
on the temporary establishment are employed on work of this nature, their
pay should, for the time being, be charged direct to the work.
2. Works establishment does not include the clerks, draftsman, subordinate or
extra establishment of any kind for the divisional or sub-divisional Officers,
such being properly chargeable to temporary establishment, but where Dak
runners are employed solely for a particular work of a temporary nature, for a
period not exceeding 6 months, they may be treated as work-charged
establishment.
3. As an exception to the general rules, the cost of khalasis attached to
subordinates may be charged to annual maintenance and repairs or other
estimates in which provision for it has been made with the sanction of the
General Manager or the Chief Engineer, as the case may be.
4. The cost of works establishment must be shown as a separate sub-head of the
estimate for a work.
5. All pay bills of work charged establishment should be approved by the Division
Officer/P.D pre-audited by the Accounts Officer/B&AO before payment.
Before the pay of a member of the work-charged establishment, whose
services have been dispensed with, is settled up, the Sub-Divisional Officer

should invariably ascertain from the Divisional Officer/P.D if there any

outstanding dues against the member.
6. Other rules of work-charged establishment as may be already existing in the
Government Codes or as may be introduced from time to time will be
applicable to the work-charged establishment of various formations of the
Authority except where there is specific exemption in any case.
7. Officer empowered in the book of Financial Powers to create posts of work-
charged establishment, can do so subject to the condition that the total
expenditure on work-charged posts specifically provided for in the sanctioned
work estimate does not exceed 1.5 percent of the total estimated
expenditure on work.
8. Ordinarily, work-charged establishment shall not be engaged for normal
maintenance and repair work for which regular establishment already exists,
except for works of emergency nature to be specified and reported to the
next higher authority.
14.10.2 Audit of Pay Bills of Work-Charged Establishment

While auditing the pay bills of work-charged Establishment the following points will
be seen:
i. The instructions laid down regarding employment and payment of work
charged establishment have been strictly followed.
ii. Pay to work-charge establishment does not exceed that admissible to
regular establishment of the same category, qualification and experience,
on initial appointment.
iii. Where higher pay has been granted, approval of the next higher
administrative authority has been obtained after giving full justification
therefore.
iv. The expenditure on work-charged establishment does not exceed 1
percent of the total estimated expenditure on the work and it is also not in
excess than provided in the estimate.
v. The types and grades of work-charged establishment employed are justified
by the quantum and nature of work.
vi. No work-charged establishment is engaged unless prior sanction as to the
number of staff in each grade, the period for which labour is engaged and
the full name (as given in the estimate) of the work is accorded by the
competent authority.
vii. When work-charged establishment is employed for more than 3 months an
establishment register is maintained by each unit showing full name,
parentage and complete address of the individuals employed with their
clear signature or their left hand thumb impressions affixed in the said
register against their names. The Officer making the attendance of said
staff has signed clearly in the Attendance Register.
viii. The Authority has decided that if record about any of the work- charged
staff is found to be deficient in regard to any of the above points, it shall be

assumed that staff has not been on job physically. The expenditure incurred
on such staff shall, in that case, be recoverable from the officer who may
have sanctioned the establishment in question and the officer/subordinate
under whom it may have been supposedly employed in the proportion of
50% each in addition to any other suitable action that may be required to be
taken against them. (Authority: Director Finance letter No. 249/FD(I)36/70
dated 15.1.1966).
ix. The attendance register has been checked by an officer not less than B.P.S.
17 at least twice a month and by the XEN once a month. If the period of
engagement of the work-charged establishment on a particular work is less
than one month, the two checks by the S.D.O. and one check at least by the
XEN must necessarily be completed during the currency of the sanction.
x. Identity card No. in respect of the employees borne on work-charged
establishment be kept on record and mentioned on the bill every month.
14.11 CONTINGENT EXPENDITURE
14.11.1 General
1. Contingent expenditure comprises those charges which are incidental to the
management of an office as an office and include the cost of Stationery,
Postage, Telegram, Telephone Charges, Furniture, Advertisement, Office
Rent, Books and Periodicals, charges on account of Hot and Cold weather,
Contingent Establishment, Liveries, repairs to Furniture, Taxi Hire on duty
connected with the office and other similar petty charges.
2. Financial Powers of the officers for incurring expenditure on contingent items
are given in the Books of Financial Powers. The contingent expenditure is,
thereof, to be made according to these powers.
3. The articles purchased out of contingencies are accounted for in the various
registers etc. as prescribed by the Authority. One of the items of contingent
expenditure is contingent establishment. This is described in the succeeding
paras.
14.11.2 Contingent Establishment

Financial powers for appointment of contingent establishment are also given in the
Book of Financial powers. These powers are subject to the following conditions:
i. Pay allowed to contingent establishment does not exceed that sanctioned
for regular establishment of the same category.
ii. Budget allocation in lump sum or otherwise exists therefore under the Sub-
head contingencies.
14.11.3 Audit of Pay Bill of Contingent Establishment

While auditing pay bills of contingent establishment it will be seen that the
conditions detailed above have been duly met in the employment of the
individuals.

14.12 TRAVELLING ALLOWANCE BILLS.
14.12.1 General
Travelling allowance is a compensatory allowance i.e. an allowance granted to
meet personal expenditure necessitated by the special circumstances in which duty
is performed. The fundamental principle is that the compensatory allowances
should be so regulated that the allowance is not on the whole a source of profit to
the recipient. For example, revision, of claims of travelling allowance is not
permissible in cases where an employee is promoted or reverted or is granted an
increased rate of pay with retrospective effect in respect of the period intervening
between the date of promotion or reverted or is grant of increased rate of pay and
that on which it is notified unless it is clear that there has been an actual change
of duties. To exercise the above check and others, the Authority has approved the
officers who shall work as Controlling Officer for the travelling allowance of the
staff working under them. No bill for travelling allowances, other than permanent
travelling allowance, can be paid unless it is signed or countersigned by the
Controlling Officer of the employee who presents it. The Controlling Officer can
not delegate to any of his subordinate his duty of counter-signature/powers.
14.12.2 Audit of T.A Claims

While auditing the T.A Claims it will be seen that the following certificates have
been recorded on the T.A claims:
i. General
a) The journey was performed in the Authoritys interest,
b) The kilometers claimed are the statutory kilometers (while performing
journey by road),
c) The officer/official travelled in the class of accommodation to which he is
entitled and as claimed in the bill,
d) The amount claimed in the bill was not claimed previously,
e) If the claimant has travelled by engaging full taxi, a certificate has been
recorded by him on his T.A bill as per prescribed Performa,
f) No casual leave/earned leave was availed during the period for which
TA/DA has been claimed.
ii. The purpose of journey has been clearly indicated on the T.A claim.
iii. The place of temporary residence has been shown in the T.A claim.
iv. The amount claimed in the T.A bill is admissible according to the prescribed
rules/regulations.
v. T.A claim has been passed and paid strictly according to approved tour
program and approved movement order.
vi. The individual claiming mileage allowance has not used WAPDA Vehicle for
the same journey.
vii. Time barred claims are not passed unless sanctioned by the competent
authority to investigate time barred claims.

viii. A claim not preferred within 6 months of its becoming due is a time barred
claim. The six months limit reckoned form the date of the individual
returning to his headquarters (or from the 1st of the following month if the
tour continues over that date).
ix. The tour of the individual is supported by a tour program or movement
order duly approved by the Controlling Officer. In order to ensure that
wasteful expenditure on the T.A has not been incurred, the Accounts Office
will see that proper movement orders, are issued by the Controlling Officer
before an employee proceeds on tour and that T.A bills are passed strictly
for the journeys mentioned in the movement order.
x. It should also be seen in Accounts Office that un-necessary expenditure is
not incurred on frequent changes of executive and accounts personnel.
14.13 MAINTENANCE OF AUDIT REGISTER
1. The Budget and Accounts Office of all formations shall maintain an Audit
Register. All payments made with any observation or deficiency shall be
recorded in this register.
2. The B&AO is expected to see that rules and orders in force are observed in
respect of all transactions within a formation/project which comes within
the sphere of his duties. In case of any deficiency in payment documents,
the B & A O will return the payment claim with remarks to the concerned
section for rectification of the short comings. However the DDO concerned
may over rule the objections and order for payment. In such a case the
B&AO shall record his observations in the Audit Register and present to the
DDO who shall record his reasons for disagreement with the B&AO.
3. This Audit Register shall be provided to the team of WAPDA Internal Auditor
on their visit to the formation.

15 FOREIGN LOANS, GRANTS AND AIDS

15.1 INTRODUCTION
WAPDA receives foreign currency loans from the sources mentioned below:
i. Foreign loans, credits, grants which are negotiated by the Federal
Government with the loan giving Governments and Agencies and are then
passed on to WAPDA under the general relending terms. Various kinds of
loans, such as IDA, KFW, CIDA, ADB, IDBP, Italian Credits, Kuwait Loans and
German Counterpart Funds, etc., in different currencies are examples of
such loans and credits.
ii. WAPDA also gets foreign financing out of the Government foreign exchange
resources acquired through directly negotiated loans and credits by the
Federal Government with different loan giving Governments Agencies e.g.
Japan, Germany, United Kingdom, France, Canada, etc. These loans are
passed on to WAPDA under the general relending terms and conditions.
However due to limited resources available WAPDA is some times obliged to
obtain technical assistance and project assistance in the form of specialized
machinery/equipment and supplies, from the countries from where loans
are made available by the Government.
iii. Foreign loans, credits, grants which are directly negotiated by the Authority
with the lending Agencies and granted to WAPDA under the guaranteed
loans and are in various foreign currencies.
15.2 PROCEDURE FOR AWARDING AND UTILIZATION
On receipts of foreign loans for WAPDA Projects on the guarantee of the Federal
Government, all the relevant documents are passed on to the concerned Project
Director/Chief Engineer for utilization, in accordance with the specific terms and
conditions of the loan. The terms and conditions may vary from loan to loan. The
Project Director/Chief Engineer after observing necessary formalities, enter into
contracts for visibles as well as invisibles, place orders or execute other erection
contracts etc., with the foreign firms and suppliers. The Project Directors/Chief
Engineers also take action towards utilization of foreign loans by arranging opening
of Letters of Credit through the Resident Representative, WAPDA Karachi, in
respect of imports of materials and through the General Managers Finance (Co-
ord., Water and Power), as the case may be, for contracts involving invisible
payments.
15.3 FOREIGN LOANS/AIDS DISBURSMENT
The following are the modes of disbursement of foreign loans/aid:

i. Opening of L/C
ii. Direct payment to the Contractor/suppliers after verification by PD
concerned
iii. Retroactive reimbursement to the PD/GM concerned for the expenses met

through self source but payable through utilization of loan

iv. Assignments/designated accounts disbursement against demand for
projected expenses covered under loan
15.3.1 Accounting of Loan Disbursement and Loan Liability
The following shall be the procedure for recording and accounting of the loan
disbursement by the Projects/accounting units:
i. Monthly disbursement report sent by the loan giving agency to the
PD/concerned GM indicating the reference of disbursement request on the
date of disbursement.
ii. Applicable rate of foreign currency conversion as appearing on the website
of the State Bank of Pakistan on the disbursement date indicated in the
statement provided by the lending agency.
iii. Concerned GMF office will record loan liability based upon monthly loan
disbursement statement of the lender and raise debit advice to the
concerned PD for recording expenses.
iv. On receipt of the Debit advice from concerned GMF, the concerned PD will
record expenses in the same month and reconcile the current accounts with
the Head Office to ensure recording of the loan liability by the GMF
concerned and expenses by the PD concerned are in the same month.
v. The concerned GMF will submit a report to the EAD on 15th of the following
month for the foreign relent loan.
15.4 FOREIGN LOANS REPAYMENTS
Foreign loans are paid in periodical installments prescribed according to the terms
and conditions of loan agreements or according to the relending terms of the
Federal Government. The installments towards repayment as well as the payment
of interest relating to loans directly negotiated by WAPDA for Power Projects, are
made by WAPDA to the Government in Local currency, which they receive through
adjustment from the ADP or WAPDA. In respect of foreign loans for Water Projects,
WAPDA, pays interest only, to the Government, during the construction period of
the Projects, whereas no repayments of loans are to be made. For repayment of
the foreign loans negotiated by the Federal Government and passed on to WAPDA
under the general relending terms, WAPDA repays the installments of loans and
interest in local currency relating to Power Projects, into the Government Account
through WAPDA Bankers out of the Authority own resources. In this case too,
interest is only paid to the Government for Water Projects, during the construction
period of the Projects. The repayment of the loan in the foreign currencies to the
loan giving agencies is arranged by the Federal Government.
The accounts for the receipt and repayment of foreign loans individually for the
projects of Co-ord., Water and Power Wings are kept in the Book Keeping Sections
of the General Manager Finance (Co-ord., Water and Power) respectively. The debt
servicing liability will be discharged by the GM Finance concerned and incorporated
in the books of their respective Wings.

Foreign loans granted for Water and Power Projects are identifiable with the
relevant project and are recorded as such. In case a loan is granted for combined
projects or various projects the same is apportioned to the respective projects on
equitable basis.

16 FOREIGN EXCHANGE PAYMENTS FROM SELF SOURCE

1. When WAPDA is required to make payments to the contractors and /or
consultants in foreign currency as part of the foreign cost component of the
project cost and does not have enough cover of the foreign loan/aid to meet
this cost component of the project, WAPDA purchases foreign currency in Pak
Rupees, from local banks at the prevalent market rates for foreign currency.
2. Foreign Exchange budget with Rupees cover for making invisible payments is
got approved from the Ministry of Finance for a year. WAPDA Authority has
authorized GMF (Power) to sanction utilization of foreign exchange budget on
receipt of formal request from the concerned Project Director. The GMF
(Power), (Water) and (Co-ordination), as the case may be, will purchase
foreign currency from local banks and make payments to the foreign
contractors/consultants as per terms and conditions of the Contract.
3. As per policy of the Government no payment to local contractors or
consultants can be made in foreign currency. They shall receive all payments
in Pak Rupees only.
16.1 ACCOUNTING OF FOREIGN PAYMENTS FROM SELF SOURCE
After making the payment to the foreign contractors or consultants in foreign

currency, the GMF (Power), (Water) and (Co-ordination), as the case may be, will
raise debit to the concerned field office equal to Pak Rupees amount spent to
purchase the foreign currency for the specific IPC/Claim.
16.2 FOREIGN EXCHANGE PAYMENTS FOR OPERATIONS AND MAINTENANCE
The payments for imports are made through letters of credit (L/C) opened and
managed by the Chief Resident Representative Karachi, a self finance unit of
WAPDA, which is providing various services to Power and Water wings as well as
other outside entities. The funds for all payments are to be arranged by the
respective office through GMF concerned which requires the L/C to be opened by
CRRK as it is a service provider and not arranger of funds.
The payments of invoices of expatriates and for invisible accounts are made by the
GMF concerned on the basis of the invoices raised.
16.3 OPENING OF LETTERS OF CREDITS
Whenever required under a contract and provided in a loan agreement the

payment may be made for utilization of the foreign loans either directly negotiated
by WAPDA or the foreign currency allocation granted by the Federal Government
for WAPDAs Water and Power Projects, through opening of Letters of Credits for
imports from the foreign suppliers and for services and invisibles from the foreign
consultants and contractors. The opening of letter of credits will be carried out by
the following offices:
i. Where WAPDA has issued purchase order to foreign suppliers only for supply
of Goods, office of CRRK will open letter of credit

ii. Where WAPDA has signed contract for supply of goods as well as
installation, testing and commissioning of said equipment with the same
supplier, office of CRRK will open letter of credit for supply of goods and
services to be rendered.
iii. Where WAPDA has signed contract with foreign consultants for providing
services for inspection, installation or studies and no supply of goods is
involved, and WAPDA has agreed to pay for said services through letter of
credit, office of GMF concerned will open the letter of credit.
16.4 PROCEDURE FOR OPENING OF LETTERS OF CREDITS
In this connection the following steps are taken:-

i. On receiving confirmation regarding availability of foreign exchange the
Chief Engineer, or the Project Director will approach the CCRK to arrange
for the opening of Letters of Credit in terms of the contract executed with
the foreign suppliers. The contract or the purchase order executed with the
foreign suppliers will necessarily indicate the full address of the ultimate
consignee and also the allocated Code of the formation which is to be
debited with the cost and other expenses. The detailed accurate name of
the Foreign Bank of the beneficiary through which the payment is desired to
be received from the loan giving agency must also be mentioned in the
Purchase Order. For the purpose of prompt accounting of the transactions
of import of materials, it should be provided in the contract/Purchase
Order that a copy of the valued invoice for the materials shipped, after
release of the payment, should be supplied direct, by the Bankers of the
loan giving agency, to the concerned CE/RE/PD, as the case may be, in
addition to the release of the shipping documents to the Chief Resident
Representative, Karachi, who opened the Letter of Credit. Before arranging
the opening of the Letter of Credit the Resident Representative, Karachi
will see that in addition to the provisions stated above, the following pre-
requisites must also have fulfilled by the office requesting for the opening
of the Letter of Credit:
a) Agreement of the loan giving agency to the grant of loan, aid exists.
b) Approval of the Federal Government to the above agreement and to
the utilization of loan or aid has been obtained.
c) Budget provision has been got approved.
d) Name of the Pakistani Bank nominated by the State Bank of Pakistan
for utilization of the loan or aid has been specified.
e) The Authority to arrange payment from the Letter of Credit exists.
f) Stipulated period for arranging payment against the Letters of Credit is
prescribed.
ii. While approaching for the opening of the Letters of Credits the Chief
Engineer or Resident Engineer or Project Director concerned will send three
copies of the Purchase Order containing complete details and supported
with all the necessary information, pre-requisite for the opening of the

Letter of Credit to the Resident Representative, Karachi besides supplying

one complete set to General Manager Finance concerned for enabling his
Book Keeping Section to keep a watch over the utilization and the
accounting of the particular foreign loan or aid.
iii. After obtaining an import licence from the Ministry of Commerce, where
necessary the Resident Representative, Karachi will open an irrevocable
Letter of Credit with a Pakistani Bank, in favour of the suppliers and a copy
of the Letter of Credit will be sent to the bank of the beneficiary. After
Shipment of the material to the ultimate consignee according to the terms
and conditions of the contract or the Purchase Order, payment is released
to the beneficiary by the Bankers of the loan giving agency against
tendering of shipping documents. The Bank on releasing payment will pass
on the retired shipping documents to the Resident Representative, Karachi
for arranging clearance of the goods at Karachi Port. (Annexure-32)
iv. A copy of the valued invoice will be sent by the Bank of the loan/aid giving
agency direct to the General Manager Finance (Co-ord., Water or Power)
concerned for crediting the loan/ aid in his books and for raising of the
debit to the formation concerned, signifying the utilization of the loan to
that extent. When the shipping documents are received by the Resident
Representative, Karachi, he proceeds to make arrangements for the
clearance of the consignments from the customs and their transportation to
the ultimate consignee. For the purpose of payment of custom duty, sale
tax and other handling charges, CRRK requisitions funds from the concerned
formation and maintains separate accounts for each purchase order and
contract of a formation.
v. On completion of the clearance of the consignments and the transportation
thereof to the ultimate consignee the Resident Representative, Karachi
issues adjustment accounts of advances for all costs for each
shipment/consignment, to the concerned Project directly.
16.5 PAYMENT OF INVOICES OF EXPATRIATES FOR SERVICES
i. Letter of Credit for invisible covering services of foreign consultants,

contractors, Inspection Agents etc. are arranged by the General Managers
Finance (Co-ord., Water and Power) for the projects of their wings. The
concerned GMF shall follow the same procedure as is mentioned under the
head Procedure for Opening of Letters of Credit.
ii. Invoices of the beneficiaries for services/invisibles come to the Chief
Engineer or Resident Engineer or Project Director concerned for their
scrutiny, acceptance and approval for payment. The approved and passed
for payment invoices are returned to the beneficiary which he represents
to the Bankers of the loan/aid giving agency. On presentation of the
approved invoices, the payment is released and the paid invoice together
with supporting vouchers are sent to the General Manager Finance (Co-ord.,
Water or Power), who opened the Letters of Credit, for incorporating the
transaction in the books of account. The paid up invoices are entered in the
registers by the section dealing with opening of Letters of Credit, for up-
dating their records and are then immediately passed on to the Book

Keeping Section for crediting the loan/aid in his books and for raising of the
debit to the formation concerned, signifying the utilization of the loan/aid
to that extent.
iii. For recording particulars of Letters of Credit, a Letter of Credit Utilization
Register (Annexure-33) will be maintained in the Offices of the General
Manager Finance, (Co-ord., Water and Power) and all the Budget and
Accounts Officers of the concerned Projects.
16.6 DOWN PAYMENTS
i. In certain cases it may be necessary to make down payments to the

beneficiary according to the terms and conditions of the contracts both in
respect of visibles and invisibles. Opening of Letters of Credit for down
payments are, not necessary.
ii. The down payments for visibles are arranged by the concerned Chief
Engineer or Resident Engineer or Project Director by making a
disbursement/withdrawl request to the loan giving agency indicating the
name, bank account details of the beneficiary. Loan giving agency, after
making the payment to the beneficiary , will raise disbursement note to
relevant General Manager Finance who will issue debit to the concerned
Chief Engineer or Resident Engineer or Project Director.
iii. The down payments for invisibles are arranged by the General Managers
Finance, (Co-ord., Water and Power) as the case may be. The down
payments are arranged by making authorizations through the Authorized
Bank of the State Bank of Pakistan, by the Bankers of the loan giving
agency.
iv. In case of down payment by a self financing units concerned Head shall
request the GMF(Power) to issue sanction order of allocation of foreign
exchange payment. On receipt of said sanction order the concerned Head
will release payment to the beneficiary from its own resources.

17 ACCOUNTING FOR REVENUE

The objective of this policy is to prescribe the guidance for the recognition and
measurement of Revenue, establish the different classes of revenue and determine
the accounting procedure for each class of revenue. The revenue function is
composed of those business processes utilized to control these amounts to ensure
that the money due to WAPDA shall be received, recorded, and properly applied.
This Revenue Recognition Policy has been developed by WAPDA focusing on the
following categories of revenue:
i. Sales of Electricity
ii. Dividend Income
iii. Interest Income
iv. Sale of Scrap
v. Sale of Stores
vi. Income from Non-utility Operations
vii. Tender fee
viii. Others
17.1 RESPONSIBILITY
The respective GM Finance shall be responsible for revenue recognition and related
matters. The respective GM Finance shall be responsible for providing guidance and
assistance regarding revenue principles and monitor compliance with the
requirements set forth in this policy.
17.2 SALE OF ELECTRICITY
The GM (Hydel Operation) will issue power sale invoice to the NTDC/CPPA in
accordance with the provision of PPA at the tariff determined by NEPRA and
gazette notification by GOP. After due scrutiny of the power sale invoice and
confirmation from the Manager Finance NTDC/CPPA, the MF (Hydel Operations) will
record sale of electricity as income and receivable from NTDC/CPPA.
The power sale invoice shall comprise of payments for a fixed charge and a
variable charge. Fixed charge payments shall be computed by multiplying the fixed
charge rate with the installed capacity and variable charge payments shall be
computed by multiplying the variable charge rate with the net electrical output in
the month to which the relevant invoice relates. The fixed charge rate and the
variable charge rate for each agreement year will be approved by NEPRA and
notified by the Federal Government in the official Gazette.
The invoice shall state the due date for payment of invoice to be on or before 25th
of the month following the delivery of invoice. In case 25th is not a business day,
the following business day shall be deemed to be the due date.
The CPPA treasury office will release payment against the power sale invoice to the
GMF (Power) in the designated bank accounts. The GMF (Power) will issue credit
advice to MF (Hydel Operation) for the payment received during the month.

17.3 MISCELLANEOUS INCOME
Miscellaneous income for WAPDA comprises of commission on collection on behalf

of Government, sale of scrap, sale of stores including application fees and
departmental charges, sale of ashes, trees, grass, rental income of property, etc.
Also grouped under this head are receipts of dividend from subsidiaries, markup on
bank investments, sale of tender documents and other miscellaneous income.
Miscellaneous income is recovered by the DDO and is remitted at the end of each
month to the GMF concerned.
Accounting Entries:
SALE OF ELECTRICITY
1. On Sale of Electricity
Dr. NTDC/CPPA Relevant Code
Cr. Electricity Sales Relevant Code
2. On Receipt of funds
Dr. Bank Relevant Code
Cr. NTDC/CPPA Relevant Code
MISCELLANEOUS INCOME
Account Title G//Ledger Code
1. Sale of Tender Documents:
Dr. Cash Relevant Code
Cr. Tender Fee Relevant Code
2. Deposit of cash at bank
Dr. Bank Account Relevant Code
Cr. Cash Account Relevant Code
3. On Receipt of Interest Income
Cr. Interest Income Relevant Code
4. On sale of scrap
Cr. Sale of scrap Relevant Code

18 INVESTMENT ACCOUNTING FUNCTION

18.1 INVESTMENT OF SURPLUS FUNDS
The surplus funds available with WAPDA should be invested strictly in accordance
with the parameters approved by the Authority in line with the policy decision of the
Finance Division vide circular no.F4(1)/2002-BR11 dated 2nd July 2003. The surplus
funds of the Authority shall be deposited with financial institution in the manner
detailed herein after.
18.2 INVESTMENT COMMITTEE
As required under the policy the Authority has set up in house professional treasury
management in the form of Investment Committees (IC) for approval of
investments of surplus funds. Transactions above the limits of the IC will be subject
to approval of Authority. The IC shall be assisted by an investment Management
Unit employing qualified staff with at least 3- 5 years of experience of managing
investment in debt/equity instruments. The decisions of these ICs shall be final.
18.3 WORKING BALANCES
The working balance required for operations may be deposited with any public or
private banks subject to the following requirements:
i. For the sake of the safety and security of deposits, the bank/ financial
institutions selected for depositing of WAPDA funds, should have a minimum
A rating as appearing on the website of the State Bank of Pakistan. This
A rating refers to the rating scale used by Pakistan Credit Rating Agency
and JCR-VIS Credit rating Company for banks incorporated in Pakistan and
Moodys Fitch and Standard & Poors rating for the foreign banks operating
in Pakistan. Rating scales of other agencies acceptable to the State Bank
should be equivalent to the rating of the above mentioned companies. In
case of any doubts, Information and clarification on this matter may be
obtained from Banking Policy Department of the State Bank of Pakistan;
ii. The process of selection of Banks should be transparent. Therefore, prior to
placing deposit with bank under this new policy, and in case the total
working balances exceed Rs. 10 million, the selection of the bank/(s) as
well as the terms of deposits will be approved by the Authority on the basis
of competitive bids from atleast three independent banks;
iii. The risk associated with keeping deposits should be diversified. Therefore,
in case where total working balance of an enterprise exceeds Rs. 10 Million,
not more than 50% of such balance shall be kept with one bank;
iv. In case the rating of the a particular bank with which funds have been
deposited drops below A, all new deposits shall be shifted within a period
of one month and old deposits within a period of two months to the
bank/(s) with at least A, rating;

18.4 SURPLUS FUNDS
The surplus funds of the Authority may be invested in non government

securities/TFCs/Shares up to a maximum of 20% of the total funds under
management.
The Authority has devised its own investment policies for investments of funds
from working capital, pension funds, benevolent funds and insurance funds
available with it under these schemes.
WAPDA has constituted independent Investment Committees/Boards for approval of
investment of surplus funds which are as follows:
Water Wing
i. Member (Finance) Chairman
ii. Member (Water) Member
iii. GM Finance (Water) Member
iv. DG Finance (B&C) Member
Power Wing
ii. Member (Power) Member
iii. GM Finance (Power) Member
iv. GM Finance (Water) Member
Insurance & Pension Funds (other than WEPS)
ii. Member (Water) Member
iii. DG (Insurance & Pension) Member
WW Funds, GP Funds and Authority Overheads
ii. Member (Power) Member
iii. GM Finance (Power) Member
18.5 OTHER INVESTMENTS BY WAPDA
The Authority holds investments in companies formed as a result of the

corporatization of the Authoritys Assets. As a result these investments are treated
as investment in associated companies till such time the transaction is completed
and the shares allotted by these companies to WAPDA are transferred in the name
of the President of Pakistan. It also holds investments in special purpose companies
formed as subsidiaries to undertake specific transactions.

18.6 CLASSIFICATION OF INVESTMENTS
The investments made by the WAPDA are classified in its financial statements as
follows:
i. Held to Maturity
ii. Available for Sale
iii. Held for Trading
Brief description of each type of classification is explained as under:
18.6.1 Held to Maturity Securities
These securities are acquired with the intention and ability to hold those up to
maturity of the investment.
18.6.2 Available for Sale Securities
The securities which do not fall within the above category are classified under this
category.
18.6.3 Held for Trading Securities
The securities acquired with the intention to trade by taking advantage of short-term
market/interest rate movements are termed as held for trading. Such securities are
to be sold within 90 days from the date of their classification as Held for Trading
under normal circumstances.
18.7 VALUATION OF INVESTMENT
The Authority will revalue the security holdings (both balance sheet as well as off-
balance sheet items) on annual basis and the same shall be properly reflected in the
books of accounts.
The Held to maturity Securities shall be carried at amortized cost and shall not be
required to be revalued. This will, however, be subject to the condition that once a
security is classified as Held to Maturity no subsequent reclassification/shifting to
Available for Sale or Held for Trading categories will be permissible
18.8 REVALUATION SURPLUS/DEFICIT
The surplus/deficit arising as a result of revaluation of Held for Trading securities

shall be taken to the Income and Expenditure Account.
Any surplus/deficit arising on revaluation of securities will not be taken to Income
and Expenditure Account except when actually realized and instead will be kept in a
separate account called Surplus/Deficit on Revaluation of Securities which will be
shown below equity and classified as under:
i. Government Securities.
ii. Quoted Shares.

iii. Other Securities may be given in the notes to the financial statements.
Any impairment in the value of Available for sale or Held to Maturity securities
will be provided for by charging it to the Income and Expenditure Account/Profit and
Loss Account.
The measurement of surplus/deficit shall be done on portfolio basis for each of the
above three categories, separately.

19 INTERWING/INTEROFFICE TRANSACTIONS
19.1 INTRODUCTION
Whenever the Head Office of the Authority makes a payment on behalf of or

transfers funds, to a Field Office, or a project the General Manager Finance (Co-
ordination) the General Manager Finance (Water and Power) as the case may be,
raise a debit for the amount, against the accounting unit concerned by issuing Head
Office Debit Advice. Conversely for any moneys received by the Head Office on
behalf of any other accounting unit within the Authority or for any reduction in an
earlier debit, they issue a Head Office Credit Advice.
i. All transactions between WAPDA projects relating to supplies from one to the
other are settled through the issue of superscribed cheques and no
debit/credit advices are issued. All SS cheques shall be en-cashed by the
DDO.
ii. All services provided by one project/accounting unit to another within a wing
of WAPDA are settled by issuing debit/credit advices.
iii. The inter-wing service charges/material payments by any accounting
unit/formation will be settled through issuance of bank cheques.
iv. In case of out-standing balance of long term loan of an employee transferred
from a wing to another wing, the GMF of the transferring wing shall issue a
debit advice to the transferee wing and net amount of said debit advice will
be settled by the GMF concerned through bank cheque at the end of each
year.
For accounting purposes and particularly for the issue of advices and superscribed
cheques relating to Head Office and Inter-Office transactions, each accounting unit
is identified by its allotted code letters.
Lists of accounting units and the code letters allotted to each, operated by the
General Manager Finance (Co-ordination, Water and Power) are notified by them.
When new units commence operations revised lists giving the names addresses and
code letters of the new units will be issued so that the code lists are kept up-to-date
by all accounting units. The office of the General Manager Finance (Co-ordination),
General Managers Finance (Water and Power) will take every care to see that the
lists are up-to-date and that revisions are made promptly and as soon as they are
necessary.
19.2 SERVICES WHERE DEBIT/CREDIT ADVICES ARE RAISED
The nature of services for which debit/credit advices are raised within a Wing, are as
follows:
i. Net Hydel profit
ii. Payment of water usage charges
iii. Water utilization cess to IRSA
iv. GST input/output adjustment

v. Ijarah Rental payments

vi. Pension fund contributions
vii. Withholding Tax on Sale of Power
viii. Lisence fees
ix. Authoritys overheads
x. Supervisory Charges
xi. Payments of WEPS contribution
xii. Payment of 4 % return on fixed asset transferred to WAPDA
xiii. Redemption of payment of sukuk
xiv. Tariff petition Fee
xv. Interest on cash development loan
xvi. Interest and exchange risk relent loan
xvii. Transfer of funds to RRK on behalf of lower Formations
xviii. Foreign loans - reimbursed
xix. Bank Charges
xx. Payment of Outside services
xxi. Pay & Allowance/ TA bills etc
xxii. Employees Long term Loans
xxiii. Payment of Advertisement Charges
xxiv. Receipt from power purchaser
xxv. Fixed Assets Transfer
19.3 PREPARATION AND DISTRIBUTION OF DEBIT ADVICES
19.3.1 Head Office Debit Advices
Head Office Debit Advices will be prepared in duplicate. The original will be sent to
the Budget and Accounts Officer of the unit which is to be debited, and the other
copy retained in the concerned Budget and Accounts Head Office. A Debit Advice
Register (Annexure-34) shall be maintained at the head office and all formations.
19.3.2 Field Office Debit Advices
Debit Advices issued by the Field Offices will be prepared in triplicate. The original
will be sent to the Budget and Accounts Officer of the unit which is to be debited,
the first copy to the Head Office concerned i.e. the General Managers Finance (Co-
ord., Water and Power) as the case may be, and the second copy retained by the
Budget and Accounts Officer of the issuing office.

19.3.3 Supporting Documents of Debit/Credit Advices
Bills, invoices, payees acknowledgement receipts, discharged bills of exchange,

inspection reports, insurance bills and all other relevant documents in support of a
debit should be enclosed with the original debit advice and forwarded to the Budget
and Accounts Officer of the unit which is to be debited. All enclosures with an advice
should be listed on that advice. Payees acknowledgement will not be enclosed with
those Head Office Debit which cover payments made by crossed cheques, with
receipt form on the reverse. In such a case the fact that payment has been made by
a paid cheque will be stated and the number of the cheque given on the debit
advices.
19.3.4 Numbering of Debit Advices
All Debit Advices will be numbered in a uniform manner to ensure easy identification
of the issuing and receiving accounting units. The number shall start with the code
letters of the issuing accounting unit, followed by the serial number of the debit
advice and after a slash the code letters of the accounting unit to which being
debited, followed by a serial number for that particular accounting unit.
19.3.5 Cancellation or Modification of Debit Advices
A debit advice should never be cancelled or modified by writing a letter. If for any
reason a debit advice is to be cancelled, or the amount of the debit is to be reduced
the cancellation or reduction of debit must be effected by issuing a credit advice.
Where the amount of the debit advice is to be increased, an additional debit advice
must be issued for the difference.
19.4 PREPARATION AND DISTRIBUTION OF CREDIT ADVICES
19.4.1 Head Office Credit Advices
Head Office Credit Advices will be prepared in duplicate. The original will be sent to
the Budget and Accounts Officer of the unit which is to be credited and the duplicate
copy retained in the concerned Budget and Accounts Head Office. A Credit Advice
Register (Annexure-35) shall be maintained at the head office and all formations.
19.4.2 Field Office Credit Advices
Credit Advices issued by the Field Office will be prepared in triplicate. The original
will be sent to the Budget and Accounts Officer of the unit which is to be credited,
the first copy to the Head Office concerned i.e. to the General Managers Finance
(Co-ord., Water and Power) as the case may be, and the second copy retained by the
Budget and Accounts Officer of the issuing office.
19.4.3 Supporting Documents of Credit Advices
All documents in support of the credit will be enclosed with the original credit
advice and forwarded to the Budget and Accounts Officer of the unit which is to be
credited. All enclosures with an advice will be listed on the advice.

19.4.4 Numbering of Credit Advices
All Credit Advices will be numbered in the same manner as the debit advices. The
number shall start with the code letters of the issuing accounting unit, followed by
the serial number of the credit advice and after a slash the code letters of the
accounting unit to which credited, be followed by a serial number for that particular
accounting unit. The series for credit advices will also start from 1.
19.4.5 Cancellation or Modification of Credit Advices
A credit advice should never be cancelled or modified by writing a letter. If for any
reason a credit advice is to be cancelled or the amount of the credit is to be
reduced, the cancellation or reduction of credit must be effected by issuing a debit
advice. Where the amount of the credit advice is to be increased, an additional
credit advice must be issued for the difference.
19.4.6 Change of Serial Numbers
1. Head Offices and Field Offices will start a fresh series of numbers of debit
advices at the beginning of every financial year i.e. on the 1st of July every
year. On the 1st July, a new series, beginning with No.1, will be started by
them and this new series will cover all debits for the year to 30th June. On the
1st July, a fresh series beginning again with No.1 will be started and that series
will be continued till 30th June.
2. A debit advice relating to a particular financial year, even when issued after
the end of that financial year, will continue to have a number in the old series,
if the issuing accounting unit has recorded the transaction in its books for the
earlier year.
3. When instructions are received from the General Manager Finance (Co-ord.,
Water and Power) that the accounts for a particular financial year are to be
closed on a specified date, no further debit advices with serial numbers
pertaining to that financial year will be issued after that date, and that
particular series of numbers will be discontinued.
4. For credit advices a similar procedure will be followed regarding the starting of
a new series of numbers and discontinuing the old series. On the 1st July of
every year a new series will be started. The old series, will, however, be
continued in respect of all transactions of the previous period which are
recorded in the books of that previous period by the issuing accounting unit. On
receiving instructions from the General Manager Finance (Co-ord., Water and
Power) about the closing of the accounts of a particular year on a specified
date, no further credit advices for that financial year will be issued after that
date, and that particular series of numbers will be discontinued.
19.4.7 Field Office Debit Advice Register
1. On receiving a debit advice from a WAPDA accounting unit, the receiving

Budget and Accounts Officer will check his records to see that advices for all
debits previously raised against him by that particular accounting unit have

been received by him. If he finds that one or more numbers in the series are
missing he will immediately inform the accounting unit concerned.
2. The receiving Budget and Accounts Officer in a Field Office or a project will
then number the debit advice serially and enter it in a Head Office/Field
Office Debit Advice Register.
3. The serial number given by the receiving Budget and Accounts Officer and the
number and date of the debit advice will be entered in the first three
columns of the register.
4. In a case where the debit is in respect of an actual transfer of funds the
amount of the debit advice will not be entered in the register and not
analysed, as the debit to cash or bank and the credit to Head Office Current
Account will have been passed through the Cash Book. In the column
Account(s) to be debited will be entered the words Transfer of Cash. The
entry of the serial number and of the number and date of the debit advice in
the first three columns will be a memorandum entry for purposes of record
only.
5. Amounts in respect of debits to all other accounts will be taken to the column
marked Other General Ledger Account.
6. At the end of a month the register will be closed, columns added and the
aggregate of the monthly totals of the analysis of debit columns agreed with
the monthly total of the Amount of Debit Advice column.
19.5 ACCOUNTING OF DEBIT/CREDIT ADVICES
On receipt of debit advice by an accounting unit the Budget & Accounts Officer
concerned will debit the asset or expense head by crediting the Head office current
account. Similarly on receipt of credit advice he will credit the liability/payable or
income account by debiting the Head office current account. The asset or expense
account will be credited, if credit advice is issued for correcting the amount of debit
advice already issued with the corresponding debit to the Head office current
account.
19.6 CURRENT ACCOUNT WITH HEAD OFFICE
It will not be necessary for the Budget and Accounts Officer of a WAPDA accounting
unit to keep separate ledger accounts for each of the other WAPDA accounting units.
Even though all original debit and credit advices are to be sent direct to the units
which are to be debited or credited, the accounting of all these transactions will be
through the General Managers Finance (Co-ord., Water or Power). For this purpose,
a Budget and Accounts Officer of an Accounting unit or other project there will be
three accounts called Head Office Current Accounts representing Co-ord., Water
or Power. All Field Office Debit Advices will be debited, and all Field Office Credit
Advices will be credited, in the books to these Current Accounts.
All debit advices received by an accounting unit from respective the General
Managers Finance (Co-ord., Water or Power) or from any other formation within the
same wing, will be credited to Head Office Current Account. Similarly all credit
advices received from the respective General Managers Finance (Co-ord., Water or

Power) or from any of the other formation within the wing, will be debited to this
Current Account.
19.7 FIELD OFFICE/PROJECT CURRENT ACCOUNTS IN HEAD OFFICE
1. The General Managers Finance (Co-ord., Water or Power) will maintain, in his
General Ledger a separate account for each formation within the respective
Wing and all advices will be recorded in the Current Account of that office in
Head Office books. All Debit advices issued by the General Managers Finance
(Co-ord., Water or Power) against a Field Office/formation will be debited to
its Current Account and all credit advice issued in favour of that unit will be
credited to its Current Account.
2. The General Managers Finance (Co-ord., Water or Power) will credit in his
books, to the Current Accounts of a Field Office the amounts of all debit
advices issued by it and debit to its Current Account the amounts of all credit
Advices issued by it.
3. Every item debited or credited to the Current Account of a project in the
subsidiary ledger will also be debited or credited to the Project Control
Account in the General Ledger, except that whenever possible the posting to
the Control Account will be in totals.
4. At the end of every month the balance of the Projects Control Accounts in the
General Ledger will be agreed with the total of the balances of all the
individual Current Accounts in the Subsidiary Project Ledger.
19.8 MONTHLY STATEMENT OF CURRENT ACCOUNT
On 5th of the following month, the respective General Manager Finance (Co-ord.,
Water or Power) will send to the Budget and Accounts Officer of every accounting
unit within the Wing, a transcript of the latters Current Account for that month in
Head Office Books. This statement will give the balance at the beginning of the
month, details of the transactions during the month, and the balance at the end of
the month.
On receiving this statement the Budget and Accounts Officer of the unit concerned
will check it with the Head Office Current Account in his ledger. If the closing
balance on the statement does not agree with that shown in the ledger, the Budget
and Accounts Officer will prepare a reconciliation of the two balances, and send a
copy of the reconciliation to the General Manager Finance (Co-ord., Water or
Power).
19.9 ANNUAL CLOSING
After the end of a financial year, the respective General Manager Finance (Water/
Power) will send to all projects within the respective Wing debit advices for
administration charges, and where applicable, for interest expenses as well. Till such
time as these debit advices for a particular year are received, the Budget and
Accounts Officer will not close the books finally for that year. Simultaneously with
the issue of these debit advices, the General Managers Finance (Co-ord., Water and
Power) will issue instructions about the final closing of books for that particular year,

and send to every accounting unit a supplementary statement of its Current Account,
in Head Office Books, for the month of June.
The closing balance shown on this supplementary statement will be the final balance
for that accounting unit for that financial year. The balance of Head Office Current
Account in the books of the unit must agree with the balance shown in statement
received from the General Managers Finance (Water or Power or Co-ord.)

20 TRANSACTIONS THROUGH SUPERSCRIBED CHEQUES

1. In order to minimize outstanding balances which are accumulated under
suspense heads in the Project Books, due to transaction, effected especially
through book adjustments, inter project transactions shall be settled by
issuing superscribed cheques, instead of raising debit/credit advices.
Superscribed cheques will be issued in the following cases:
i. For Stores supplied by one project or office to another.
ii. For services provided on behalf of formations/field offices of other wing.
2. For the purpose of settlement of the store supplied by one project/formation
to the other, special cheque books will be got printed by the General Manager
Finance (Co-ordination) and supplied to the General Managers Finance (Water
and Power) for issue to the projects of their respective Wings. In order to
safeguard against any misuse, such cheques will be pre-numbered and
superscribed Not payable in Cash and crossed with the words Account
Payee only. Complete record of these cheque books will be maintained in all
the offices (Annexure-36) i.e. the General Managers Finance (Co-ordination),
(Water and Power) and the projects, in a memorandum register. For security
purpose, these cheques will be treated at par with the Bank cheques, and
every officer dealing with them will be accountable for the unused cheques.
Special receipts will be used in the case of these cheques and in order to
keep the receipts for special cheques distinct from those for cash and
ordinary cheques the same form may be superscribed in red ink as Receipt
for Special Cheques. The form may also be utilized for acknowledging
receipt of superscribed cheques by adding the words received (amount)
through superscribed cheques. SS cheque issue and receipt register is given
in Annexure-37.
3. Issue of materials and stores to WAPDA Project will not be through book
adjustments but by making payment through superscribed cheques. The
Materials Requisition Slips (M.R.S.) should be prepared by the requisitioning
project, in triplicate. Two foils of the M.R.S. will be sent to the supplying
project in advance and indicating the availability of the material and the
price to be charged. On receiving the M.R.S. the Budget and Accounts Officer
will price the material to be supplied. The priced M.R.S. will be retried to
the requisitioning project. The requisitioning officer should approve the
M.R.S. and send two foils thereof alongwith superscribed cheques, for the
amount involved, to the supplying officer. Both the requisitioning and the
supplying officers who approve the M.R.S. should be of a rank not below that
of an Executive Engineer. The official who should not be less than Sub-
Engineer or Line Superintendent in rank should take the M.R.S. and the
superscribed cheque alongwith the Measurement Book and inspect the stores
and make entry in the Measurement Book on the spot. These entries should
also be signed by the official supplying the stores. The material will not be
removed from the stores before handling over the superscribed cheque. After
completing transaction the second foil of M.R.S. should be retained by the
supplying project and the other foil should be retained by the supplying
project and the other foil should be taken back by the receiving
officer/official.

4. The stationery stores will be indented by the various projects/offices in the

proforma which is a modified form of Material Indent Form. The indent will
be prepared/in quadruplicate and signed by officer incharge of project/office
himself or by a staff officer authorised to do so on his behalf. The indenting
officer will detail a representative from his office with the indent alongwith
signed Superscribed Cheques leaving the amount to be inserted by the officer
incharge Central Stationery Stores on the basis of the stores actually issued
and priced which will be indicated in the relevant columns of the indent and
signed by both issuing officer and representative of the indenting officer.
5. The procedure of detailing a representative alongwith the signed
Superscribed Cheque will not apply to the case of Divisions/Directorates and
various supervisory offices of Water and Power Wings and those of Common
Services in whose case Deputy Manager Finance (Power and Water) happen to
be Drawing and Disbursing Officers. In the case of these offices the
transactions relating to issue of Stationery Stores will be carried out by the
respective Drawing and Disbursing Officers centrally at the close of each
month on receipt of monthly bills from the Central Stationery Stores. The
sanctioned budgets of such Offices/ Divisions will be debited to the extent of
stores received by the General Manager Finance of Water or Power Wing, as
the case may be, by making necessary entries in the Head Office Books.
6. When it is not possible or feasible to depute any officials to take delivery of
the stores, personally and advance cheque of the calculated cost of the
stores, to be obtained will be sent by the requisitioning project alongwith the
two foils of the M.R.S. The supplying project will complete the foils of M.R.S.
and send one of them back to the requisitioning project. Any variation
between the amount of this cheque and the actual cost of stores will be
adjusted subsequently. The subsequent adjustment should also be through
superscribed cheques. Similar Adjustments will be made in respect of
variations, if any, between the amount of the cheque and the actual cost of
materials, in cases where the Sub-Engineer takes delivery of the stores.
7. To improve the liquidity position, outstanding liabilities between O&M
accounting unit and Development Projects (Water and Power Wings)
Superscribed Cheques received/issued shall be converted into cash on
monthly basis.
8. A separate column will be opened in the Cash Book for Special Superscribed
Cheques both on the payment and the receipt side. All special cheques issued
will be entered in the special column on the payment side and all cheques
received will be entered in the special column on the receipt side. The
amount of the cheques issued in connection with the receipt of stores, will be
accounted for by a debit to Inter Office Transfer Clearing Accounting and a
credit to the store. Similarly the amount of the cheque received for the issue
of stores, will be accounted for by a debit to the head of the concerned Field
Office and a credit to the head Inter Office Transfer Clearing Account. The
debit to Inter Office Transfer Clearing Account as a result of the issue of
cheques will be cleared by the credit afforded to this account in debiting the
work concerned or head stock from the GRN register, in which a reference to
the number of the superscribed cheque issued will also be made. Similarly the
credit to Inter Office Transfer Clearing Account, as a result of the receipt

of cheque will be cleared by a debit afforded to this account in crediting the

work concerned or head stock from the Stores Issue Register.
9. The amount of the SS cheques issued for supplies received will be accounted
for through journal voucher by a debit to the work concerned and credit to
the Payable account of respective formation. Similarly the amount of the
cheque received for services rendered will be accounted for through journal
voucher, by a debit to the head Receivable from respective formation and
credit to the work concerned or income account.
10. The payment to be made through bank cheques by a formation against the SS
cheque issued will be arranged from concerned GMF whereas the payment
received against SS cheque will be remitted to concerned GMF and transfer of
such funds will be made to current accounts.

21 RAISING FUNDS THROUGH BONDS/SUKUK/TFC ETC

In order to finance its projects from own sources WAPDA is empowered under
clause 5 (c) of Chapter-III, of WAPDA Act, to raise funds through
Bonds/Sukuks/TFC, subject to approval of Government of Pakistan. These long
term instruments are issued for financing of Hydel Power development Projects
under the Government of Pakistans guarantee. To proceed with the financing
proposal a draft summary for the approval of the ECC is moved to Ministry of Water
and Power indicating the details of the project, the requirements, the proposed
mode of raising funds (TFC/SUKUK/Bonds ) repayment scheme and other details.
On receipt of the GOP approvals following steps will be taken to complete the
transaction:
i. The information memorandum is prepared and circulated to financial
institutions inviting them to participate in the process.
ii. Terms and conditions put forward by the financial institutions will be
evaluated and the best offer/proposal is selected by the Authority.
iii. The financial terms and conditions of the selected proposal is forwarded to
the Finance Division through Ministry of Water and Power for approval of
the Term Sheet.
iv. After the approval from Finance Division, mandate is awarded to the
selected institution to act as Advisor /Arrange of the facility.
v. As per conditions precedent of the term sheet, the Authority appoints Legal
Counsel, Trustees and Registrar for undertaking the issue.
vi. As per term sheet, the Project or the selected part of the Project (Assets) if
any are identified to structure the transaction.
vii. A special purpose SUKUK Company is formed and registered with SECP,
rating of the instrument is obtained from the Credit Rating Agency and bank
accounts are opened for receipt of the funds.
viii. After the transaction is finalized and confirmation of the Arranger, Investors
and legal counsel, the legal agreements are forwarded to the Law Division,
through Ministry of Water and Power and Finance Division for vetting.
ix. Duly signed agreements and the transaction documents are furnished to
Finance Division for approval and issuance of the GoP Guarantee.
x. Once all conditions of Transaction/Facility are completed, Disbursement
Notice is served on the Lead Arranger to transfer the transaction amount in
the designated bank account of WAPDA.
Accounting Entries
On sale of asset to Sukuk Co
Dr. Receivable from Sukuk Co Relevant Code
Cr. Sale of Asset Relevant Code
On sale of Asset

Dr. Accumulated Depreciation Relevant Code

Cr. Asset Relevant Code
Dr./Cr. Loss/profit on sale of Asset
On Ijarah becoming due
Dr. Ijarah rentals Relevant Code
Cr. Ijarah rentals payable Relevant Code
On payment to Sukuk Co
Dr. Ijarah rentals payable Relevant Code
Cr. Bank Relevant Code

22 ACCOUNTING OF SELF FINANCING UNITS/WAPDA FUNDS

22.1 ACCOUNTING OF SELF FINANCING UNIT
The self financing units are the formations which work under administrative control
of a particular wing but provide services additionally to the formations of other
wing of WAPDA as well as Ex-WAPDA DISCOs, GENCOs and NTDC.
The self financing units presently administered by Power, Water and Common
Services Wings of WAPDA have been listed as below.
22.2 SELF-FINANCING UNITS OF POWER WING
1. Chief Resident Representative, Karachi

2. GM(Training) for WAPDA Engineering Academy Faisalabad and WAPDA Staff
College Islamabad.
22.3 SELF-FINANCING UNITS WATER WING
1. Complete Self financing Unit

i. Central Design Office
ii. Central Material Testing Laboratory
iii. Dam Monitoring Organization,
iv. International Sedimentation Research Institute (ISRIP)
v. Model Study Cell
2. Partial Self financing Unit
i. GM (C&M)
ii. GM(TS)
iii. GM(LA&R)
iv. Surface Water Hydrology (SWC)
v. Hydrology & Research Project (HRP)
vi. Water Resources Management Directorate (WRD)
3. Common Services
i. Medical Services
ii. Buildings Circle
iii. Printing & Stationery
iv. Public Relations
v. Internal Audit
vi. Transport

22.4 PROCEDURE FOR SETTING SERVICE RATES
1. The self financing unit recovers their actual operational and establishment
cost including Supervisory overhead and Authority overhead at predetermined
rate, from time to time, from the formations receiving the services on actual
need basis. Any over/under applied expenses of said self financing unit are
adjusted at the time of determining Service charge rate for the next financial
year.
2. Purchase of physical assets of a self financing unit is financed by GM/DG
Finance of respective Wing, which is repaid by the self financing units by
charging depreciation and return on investment (ROI) in the service charges to
the beneficiary formations. While determining the service charges rates of a
self financing unit for a financial year, the ROI will be added to the
operational & establishment budget estimates of the concerned self financing
unit @ 15% of the written down value (net operating value) of the fixed assets
financed by the GM/DG Finance of the respective wing. The written down
value of assets will be taken as base of working of ROI as appearing in the
Trial Balance for the month of June of last year.
3. The store inventory, employees house building/purchases of plot and
purchase of vehicle loan are also financed by the GM/DG Finance of respective
Wings and self financing unit will repay the same by recovering the cost /loan
from the clients and the employees as the case may be as per prescribed
terms.
4. The GM/DG Finance of respective wing will fix working capital limits of each
self financing unit to meet with funding needs for purchase of inventories and
other cost incurred before receipt of services revenue by the self financing
unit. The deficit and surplus of cash balance from the working capital limits
fixed will be monitored and supported by the GM/ DG Finance of respective
wing.
5. In case, certain assets of a self financing unit are purchased through obtaining
loan from the commercial bank, these assets and loan will be accounted for in
the books of accounts of that self financing unit. The concerned self financing
unit will be responsible to repay the loan along with interest out of the funds
generated through levy of the services charges. The self financing unit will
retain proportionate share of depreciation and Return on investment for the
assets financed through said loans to service the debt on schedule.
6. In case, certain assets of a self financing unit are acquired through non
refundable Grants/ Aids, these assets and Grants/ Aids will be accounted for
in the books of accounts of that particular self financing unit and amortized
over the economical useful life of the said assets.
22.5 FINANCIAL REPORTING
The financial reporting by self financing unit to the GM/DG Finance of the
respective Wing will be similar to those of, as has been prescribed for other
formations/ Field Offices of respective Wings.

22.6 ACCOUNTING OF FUNDS
WAPDA has formed a number of independent Funds to undertake investments

independent of the working of the Authority. These funds are managed by the
Trustees or Board of Directors depending on structure of the Fund. These Funds
maintain their accounts on the same principle as outlined for Self Financing Units.
The only difference is in the reporting and approval pattern, which rests with the
Trustees/Board.
The Funds already formed by the Authority are:
i. Pension Fund
ii. Employees Provident Fund (EPF)
iii. Employees Medical Benefits Fund (EMBF)
iv. Workers Welfare Fund (WWF)
v. WAPDA Equipment Protection Scheme (WEPS)
vi. Pakistan WAPDA Foundation (PWF)
vii. Group Life Insurance (GLI)
22.7 ACCOUNTING OF SPECIAL PURPOSE VEHICLE COMPANIES
WAPDA has also formed special purpose vehicle companies (SPVs) as separate legal
entities with specific objective of raising funds through issue of Sukuks. These
companies are managed as independent self financing unit. The accounting is
therefore done on the same pattern as for self-financing units.

23 TAX RETURNS
23.1 WITH-HOLDING INCOME TAX RETURNS
Accounting incharge of each DDO Office will be responsible to deduct income tax at
the prescribed rates from the claims/bills when making payments to the
contractors and suppliers. Similarly the tax shall be deducted from the salaries of
the employees. The tax so deducted shall be deposited in the Government treasury
within seven days of the deduction.
The accounting incharge will also be responsible to file the withholding tax returns
with the FBR on the due dates.
23.2 GENERAL SALES TAX RETURNS
Director Tax of the office of the GMF (Power) will be responsible to file the
consolidated GST Return (Annexure-38) with FBR on the given dates, based upon
the input and output tax details received from the respective field offices of
power, water and Co-ordination wings. The GST refund or deposit will be dealt
with by the Director Tax.
The accounting incharge of each DDO office will pay the GST against GST invoice to
the supplier and will also collect GST by issuing GST invoice to the purchaser on
sale of power and scrap. He will send input/output GST details on 5th of the
following month to the Director Tax for filing consolidated GST return with FBR
alongwith the amount of the GST collected from the clients.
Based on the consolidated input/output return, the Director Tax will issue
debit/credit advice to the concerned DDO office by debit/credit to FBR and settle
the payable in cash, on materialising of refund claim from FBR.
23.3 PROVINCIAL SALES TAX RETURNS
Accounting incharge of each DDO Office will be responsible to deduct provincial

sales tax at the prescribed rates from the claims/bills when making payments to
the contractors and suppliers. The tax so deducted shall be deposited in the
treasury of the respective province within seven days of the deduction.
The accounting incharge will also be responsible to file the sales tax returns.

24 REPORTING
24.1 CONTROL OVER EXPENDITURE THROUGH BUDGET CONTROL REGISTER
1. Under the provisions contained in Chapter VI of WAPDA Act, 1958, complete

and accurate books of accounts of all Projects/Schemes and transactions
relating to the Authority shall be maintained to the satisfaction of the Federal
Government on whose behalf the accounts of the Authority shall be audited
every year by the Auditor-General of Pakistan.
2. For the purpose of accounting, the Authority may be broadly divided in four
major divisions, namely:-
i. Water Wing-Development Schemes
ii. Power Wing-Development Schemes
iii. Power Wing- Hydel power stations
iv. Common Services
3. The primary unit of accounting in the case of Development Projects/Schemes
of both Water and Power Wings or the Projects where disbursement of funds
actually takes place and where Budget and Accounts Officers of appropriate
ranks, with teams of adequate sizes, are posted to perform two-fold duties as
under:-
i. As Budget Officers for rendering full assistance to the Project Directors
in the preparation of Annual Budget Estimates, Control of expenditure
against approved Budget, preparation of various other budget
statements, such as Revised Estimates and doing all exercises for
obtaining re-appropriation orders where necessary, including
preparation of monthly expenditure statements, according to the
various sub-heads of the approved budget:
ii. As Accounts Officer for maintaining Cash and Stores Accounts of the
Project, making disbursements after due scrutiny of all bills, doing book-
keeping, preparing Trial Balances and all other accounts statements as
may be required by the Project Directors and the higher authorities up
to Comptroller posted with Managing Directors, for facilitating
managerial decisions at all levels.
4. The accounting instruction laid down in this manual as well as those laid down
in WAPDA Budget Manual will be generally kept in view by all Budget and
Accounts Officers/Staff and the Project Directors employed on Development
Projects/Schemes of Water and Power Wings.
5. Project expenditure will be controlled strictly according to the Annual
Development Programme, Approval to the annual budget of all formations is
granted by the Authority in the major and minor heads of budgets. The
classification of accounts heads of expenditure, must also always correspond
with the major and minor heads of budget. The monthly, as well as the
periodical progressive expenditure of the Project should be controlled by the
accounting units through a comparison with the periodical proportionate

budgets approved for their formations. For this purpose the Budget and
Accounts Officers of the Projects will open and maintain a Budget Control
Register, for their accounting units. The specimen form for this Control
Register is appended as Annexure-39.
6. In this Control Register the annual approved budget under various major and
minor heads of accounts will be entered. Monthly, as well as the periodical
progressive expenditure till the close of the financial year should continue to
be analyzed with the monthly and the periodical proportionate budget for
each and every minor head, as far as possible. If in certain cases of works
expenditure etc. it is not possible to control it strictly in accordance with the
monthly proportionate budget then the expenditure should be controlled on
the basis of quarterly proportionate budgets. The administrative expenses
should, however, be controlled according to the monthly proportionate
budgets. Any variations during a month should be adjusted during the next
accounting month.
7. When the original budget of formation is revised during the course of the
financial year, the revised budget will be incorporated in the Control Register
at that stage and the expenditure during the remaining months of the
financial year will be controlled according to the monthly proportion of the
remaining budget.
8. At the close of the monthly accounts by 10th of the month following that to
which the expenditure relates, the Budget and Accounts Officer of a Project
will prepare expenditure statement, showing the monthly, as well as the
periodical progressive expenditure figures against the periodic progressive
budget totals, minor-head-wise and will submit the statement to his Project
Director/Chief Engineer, as the case may be with a copy to the Budget and
Accounts Officer/ Director Budget and Accounts attached with the Chief
Engineer/General Manager concerned. The B&AO will also prepare following
statement and management reports alongwith monthly expenditure
statement:
i. Trial Balance
ii. Balance Sheet statement of current month in comparison with last
financial year closed on June, 30.
iii. Profit and Loss Account of current month in comparison with same month
of previous year and Profit & Loss Account for current financial year to
date in comparison of last financial to date.
iv. Notes to Balance Sheet and Profit and Loss Account for current month in
comparison with last financial year closed.
v. Bank Reconciliation Statement with Bank Statements
vi. Inventory Movement Report
vii. Manpower sanctioned working /vacant position as of end of related
month.
viii. Pending legal cases status as of end of month.
ix. Employees Loan/Advances aging analysis at related month end.

x. List of commitments at related month end.

9. On receipt of these expenditure statements in the offices of the Chief
Engineers/General Managers, controlling the different Project Directors/
Chief Engineers, the Budget and Accounts Officers/Directors Budget and
Accounts, attached with them will consolidate the expenditure as compared
with the budget and will place the consolidated result before their Chief
Engineers/General Managers. The Director Budget and Accounts attached with
the General Managers will also submit the consolidated statement of the
monthly and periodical progressive expenditure to the Managers Finance
(Water and Power) attached with the Members as the case may be, up to the
15th of the subsequent month to which the expenditure relates. The General
Managers Finance (Water and Power) will consolidate the expenditure relating
to all formations received through General Managers of the two and will then
reconcile the same with the figures of expenditure extracted by their book-
keeping sections from the Project Control of the two wings. The difference
between the two sets of figures may be due to the following main factors:-
i. Non-accounting of Regional Office debit/credit advices and of the Head
Office debit/credit advices relating to remittances of funds and of
services rendered or payments made on behalf of the Projects, in the
books of the Projects, but accounted for by the Head office in their
respective Project Control Account.
ii. Un-utilised funds remaining with the Projects at the close of the month,
treated by the Head Office as project expenditure, but not taken as
expenditure by the Projects in the monthly accounts under report.
10. For eliminating the chances of huge variations occurring due to the above
factors, in the figures of expenditure of the monthly statements rendered by
the Project through their General Managers to the General Managers Finance
(Water and Power) and the figures of expenditure as appearing in the
Project Control of the two wings; the following procedure should be
adopted for booking of the expenditure of a formation, both by the concerned
accounting unit as well as by its Head Office.
i. All transactions between WAPDA Projects are settled through the issue
of Superscribed Cheque and no Inter-Project debit/credit advices are
issued. Debit/Credit advices can only be issued by the concerned Head
Office or by a Regional Office, in connection with the remittance of
funds or for services rendered or any payments made on behalf of the
Projects. Such debit/credit advices can hardly be disputed and as such,
should invariably be accounted for by the Projects in the same month, in
which they are issued by the Head Office/Regional Office.
ii. Funds should not be allowed to remain un-utilised with the Projects, at
the close of a month. It will be the personal responsibility of the Project
Director and of the Budget and Accounts Officer of a Project to ensure
that no funds remain un-utilised due to non-payment of the bills and
invoices of the contractors, suppliers etc. for which funds were
requisitioned.
iii. Monthly expenditure statement and Trial Balance of a unit is prepared
only after reconciling the monthly current account with the Head

supervisory office and recording the outstanding Debit/Credit Advices in

the related month.
11. After reconciling the consolidated statements of expenditure received from
the Directors, Budget and Accounts, attached with the General Managers of
the two wings, the General Manager Finance (Water and Power) will put the
Wing-wise figures of expenditure, compared with the proportionate budgets,
to their Member concerned by the 20th of the month for their information and
taking managerial decisions deemed necessary by them.
12. Copies of the monthly expenditure statements of the Water and Power Wings
will also be supplied by the General Managers Finance (Water and Power) to
the General Manger Finance (Coordination) for compiling statistics for the
purpose of the Authority and the Federal Government.
13. The accounts of the Common Services shall be maintained by the General
Manager Finance (Co-ord.) attached with the Member (Finance) in accordance
with the instructions generally laid down in this manual. Before closing of the
final accounts for a financial year, the annual, expenditure of the common
service maintained by the Manager Finance (Co-ord.) in his books, will be
distributed by him as Supervisory Expenses and Authoritys Overheads,
according to the approved ratios as laid down in the Annual Development
Programme, directly over the expenditure of Water Development Projects
and through the Manager Finance (Power) over the expenditure of Power
Development Projects. The accounting books kept for the annual expenditure
on common services will thus be closed.
14. Balance Sheets for the Development Projects in the Water and Power Wings
after accounting for expenses relating to Overheads and Interest will be
prepared by the General Manager Finance (Water and Power) from the Trial
Balances received from the Projects of their respective wings.
15. Hydropower formations shall maintain their books of accounts in accordance
with the instructions laid down in this Accounting Manual. Copies of monthly
accounts shall be submitted by the Accounting Head to the Manager Finance
posted with GM (Hydel) Operation. The Manager Finance shall render the
consolidated accounts, including Statement of Revenue Receipts and
Operation Expenditure, Profit and Loss Accounts and Balance Sheets, to the
Director Corporate Planning posted with General Manager Finance (Power).
The latter will consolidate the accounts and prepare annual Balance Sheet of
the entire Hydropower formations in his office.
16. Balance Sheets prepared by the General Manager Finance (Water) for the
Water Development Schemes and by the General Manager Finance (Power) for
the Power Development Schemes and for the Hydropower formations will be
sent to the General Manager Finance (Co-ordination) for consolidation.
17. General Manager Finance (Co-ordination) shall consolidate annual accounts of
the entire Authority and prepare one Balance Sheet for submission to the
Authority. General Manager Finance (Co-ordination) shall also prepare annual
accounts and consolidated Annual Budget Book of the Authority from the data
to be collected from General Manager Finance of Water and Power Wings.

18. The General Managers Finance (Co-ord. Water and Power) and the Manager
Finance / Director (B&A) shall occasionally pay visits to the
Projects/formations under their control, to ensure that books of accounts are
maintained strictly in accordance with the procedure approved by the
Authority and that they are always kept up to date and that suspense has not
been created unnecessarily.
24.2 ANNUAL REPORT OF WAPDA
1. The Authority is required, as per section 21 of the WAPDA Act 1958, to present
to the Government of Pakistan an annual report detailing the conduct of its
affairs during each year ended on June 30th. This report shall cover financial
and operational result of the year together with the details of the major
events relating to WAPDA business. This annual report is to be submitted to
the Government latest by September 30th of the following year. The office of
Secretary WAPDA is responsible for compilation of this report.
2. In order to compile consolidated report at Head Office, each DDO/Project
Director shall prepare monthly business report covering the financial,
operational and other business related activities and provide the same to its
supervisory office by 20th of next month. Each DDO/Project Director shall also
submit to its respective supervisory office, following progress report on
monthly basis:
i. Development Projects Monthly Progress Report
ii. Hydel Power Stations Monthly Form-E
iii. Self Finance Units Monthly Business Report.
3. The reports shall be examined by the respective supervisory officer before being sent
to GM Finance for his review and further action.
24.3 DONOR SPECIFIC REPORTS
WAPDA shall prepare and submit all donor specific report in accordance with the
terms of loan agreement. The respective GM Finance shall be responsible for
ensuring that these donor specific reports are submitted in timely manner.
24.4 RESPONSIBILITY
The respective GM Finance shall be responsible for the timely consolidation,

preparation, approval and submission of all required financial reports, including
interim and final reports required according to approved accounting standards
applicable in Pakistan. The respective GM Finance shall also be responsible for:
i. Establishing and coordinating the annual financial closing and related audit.
ii. Establishing all closing schedules to ensure that the financial statements are
completed by September 30 of each year.
iii. The GM Finance shall be reportable to the respective Member for ensuring
implementation of policy and procedure related to financial reporting.

24.5 WAPDA HYDROELECTRIC REGULATED BUSINESS
WAPDA is engaged in power generation through use of hydel source. As a license

holder for power generation it is required to present its financials on a prescribed
format as required by NEPRA. These financials take into account only that part of
the expenses of the Authority as directly related to power generation. The GMF
(Power) shall be responsible to prepare the financial statements for the NEPRA
regulated business as per the procedures issued by NEPRA for all entities engaged in
generation and sale of Power. These financial statements are required to be
audited by a firm of Chartered Accountants.
24.6 GENERAL GUIDELINES
The general guidelines in respect of financial reporting are as below:

i. The annual financial statements shall include WAPDAs operational, services,
activities, and those of its subsidiaries as part of WAPDAs operations.
ii. The annual financial statements shall be subject to annual audit.
iii. The annual financial report shall be submitted to the Authority for approval.
iv. All operating accounting units shall comply with the closing schedule.
v. All WAPDA self-financing accounting units that maintain separate financial
accounting system shall report the results of those operations to the
supervisory office on a monthly basis.


APPENDICES

Annexure - 1 - Abbreviations
Abbreviations
A/C Account
ADB Asian Development Bank
ARE Assistant Resident Engineer
B&AO Budget And Account Officer
BOQ Bill Of Quantity
BPS Basic Pay Scale
CCC Central Contract Cell
CE Chief Engineer
CGU Cash Generating Unit
CIDA Canadian International Development Agency
Co-ord Co-ordination
CPPA Central Power Purchasing Agency
CRRK Chief Resident Representative Karachi
DDO Drawing & Disbursement Officer/Office
DG Director General
DGM Deputy General Manger
EAD Economic Affair Division
ECC Economic Coordination Committee
EMBF Employees Medical Benevolent Fund
EPF Employee Provident Fund
GL General Ledger
GLI Group Life Insurance
GM General Manager
GMF General Manager Finance
GOP Government Of Pakistan
GRN Good Receive Note
GST General Sales Tax
H/Q Headquarter
HR Human Resource
IAS International Accounting Standard
IC Investment Committees
IDA International Development Association
IDBP Industrial Development Bank Of Pakistan
IFRS2 International Financial Reporting Standard 2
IPC Interim Payment Certificate
IRSA Indus River System Authority
JV Journal Voucher
L/C Letter Of Credit
LPS Ledger Posting Summary
MF Manager Finance
MRS Material Requisition Slip
NEPRA National Electric Power Regulatory Authority
NIC National Insurance Company
NTDC National Transmission And Despatch Company
O&M Operations And Maintenance

Abbreviations
PD Project Director
PPA Power Purchase Agreement
PWD Public Work Department
PWF Pakistan WAPDA Foundation
RE Resident Engineer
ROI Return On Investment
SE Superintendent Engineer
SECP Security Exchange Commission Pakistan
SMB Store Measurement Book
SPV Special Purpose Vehicle
SRW Store Return Warrant
SS Cheques Superscribed Cheque
SUKUK Islamic TFC
T&P Tools And Parts
TA Travelling Allowance
TFC Term Finance Certificate
VLK Value Ledger Keeper
WAPDA Water And Power Development Authority
WEPS WAPDA Equipment Protection Scheme
WWF Workers Welfare Fund

Annexure 2 - Chart of Accounts
PAKISTAN WAPDA - Power Wing

General Manager Finance (Power)
Consolidated Chart Of Account List (Group Level)
A/c Code Account Head
1 ASSETS
01 Operating Fixed Assets/Costs
02 Acc. Depreciation - Operating Fixed Assets
03 Assets under Ijarah Finance
04 Accumulated Depreciation-Assets under Ijara Finance
05 Assets Subject to Finance Lease
06 Accumulated Amortization-Assets Subject to Finance Lease
08 Capital Work in Progress
09 LONG TERM INVESTMENTS
11 Lt. Advances, Deposits & Prepayments
13 Deferred Costs
14 Stores, Spare Parts and Loose Tools
15 Accounts Receivable-Trade Debtors
16 Allowance for Bad Debts-Trade Debtors
17 Production in Progress
18 Short Term Investments & Loans
20 Notes Receivable
22 Advance, Deposits and Prepayment
23 Consignment Prepayment Account
24 Inter Office Current Account
26 Current Receivable
27 Allowance for Bad Debts-Other Receivable
29 Cash and Bank Balances
2 CAPITAL AND RESERVES
30 Capital & Reserves
31 Surplus on Revaluation of Operating Fixed Assets
3 LIABILITIES
32 Redeemable Borrowed Capital
33 Liabilities Against Assets Subject To Finance Lease
34 Grants
35 Long Term Loans, Advances & Deposits
36 Deferred Liabilities & Long Term Reserves
40 Short Term Loans/Finance/Running Finance
42 Consignment Credit Account
44 Clearing Accounts
45 Creditors, Accrued and Other Liabilites
46 Short Term Deposits

A/c Code Account Head
4 INCOME
52 Power Sale
53 Services Income
54 Trading Income
55 Other Income
5 EXPENSES
60 Fuel Charges
61 Salaries, Wages and Other Employee Benefits
63 Repairs and Maintenance
65 Depreciation-Fixed Assets
66 Depreciation on Assets Under Ijarah
67 Amortization-Assets Subject to Finance Lease
68 Taxes & Other Charges
70 Power, Light, Gas and Water
71 Communication
73 Other General Expenses
74 Insurance Plant
75 Bad Debts/Doubtful Debts
76 Travelling Expenses
77 Advertisement & Periodicals
78 Amortization of Deffered Debits
80 Survey and Feasibility Expense
82 Legal & Professional Charges
84 Outside Services Employed
88 Vehicle Expenses:
89 Sundry Expenses
90 Management Service Charges
91 4% Return on Assets
92 Hydel Levies
94 Nepra Fees
95 Ijara Rental
96 Financial & Other Charges
97 Provision for Reserves
98 Other Charges

Annexure 3 Subsidiary General Ledger Account
Subsidiary General Ledger Account

Name of formation-----------------------
10 digit Accounts Code ---------------- Accounts Description---------------------
VOUCHER Folio Reference Remarks/nature Amounts

Date Type No. No. DR CR Balance

Annexure 4 - Fixed Assets Register
FIXED ASSETS REGISTER

Identification Code
Depratment/
Location/ Section to Date of Revalued
Original Date of Classification Rate of
Description Custodian of whom Revaluation amount (if
Cost Acquisition of the Item Depreciation
item Depreciation (if any) any)
is charged
Depreciation Written
Date Reference
For the Year Accumulated Down Value

Annexure 5 - Contractor Ledger

CONTRACT LEDGER FOR WORK
Name of work: __________________________________
Site of work: __________________________________
Name & address of contractor:
CNIC No. __________________ NTN No. ______________ GST No. ________________
Admn Approval No. __________________ Date: ______________Technical Sanction No. _____________
Amount Rs. ___________________ Amount Rs. ______________Revised if any _____________ Amount Rs. _____________
Work Order No. ___________________ Dated ______________Amount Rs. _____________
Date of Completion (Estimated) ___________________ Date of Completion (Actual) _____________
Date/Period of Extension if any ___________________ Performance Guarantee No Rs. ___________________ Expiry Date ________________
DEDUCTIONS
Date Bill No. Date Gross Amount Mobilization Retention Net Payable Signature
Withholding Tax Others Total Deductions
Advance Money

Annexure 6 - Goods Received Note
GOODS RECEIVED NOTE

No.
..Project
Dated 20
In response of Purchase Order No....date....
Received from.
of
against their invoice No.dated
the following:-
Unit of
Stock Code Description of Goods Measureme Quantity
nt
Received By
(Signature)
..
(Designation)
Distribution:
Original ( ) for Budget and Accounts Officer.
First Copy ( ) for Supplier.
Second Copy ( ) to be Retained by Storekeeper.

Annexure 7 - Goods Received Note Register
GOODS RECEIPT NOTE (GRN) REGISTER
Name of Store..
Detail for the month of
Name &
GRN
Sr.No Designation of Amount of GRN
No. Date Receiving

Annexure 8 - SMB Register
STORE MEASURMENT BOOK (SMB) REGISTER

Name of Store..
Detail for the month of.
SMB Supplier's Invoice

Name of Supplier/
Sr.No Item Code
Supplying Officer
No. Date No. Date Amount

Annexure 9 - MRS Register
MRS REGISTER
Name of Store..
Detail for the month of
Name &
Material Requisition Slip
Sr.No Designation of Amount of MRS
No. Date Requisiting

Annexure - 10 - Stock Register
STOCK REGISTER
(Name of Article)... Stock Code No..
Location in Store Unit of Measurement
Document Description of Account Code

Date Referenc Account to be to be Quantity
e Credited/Debit Credited/Debi
Received Issued Balance

Annexure 11 - BIN Card
BIN CARD
(Name of Article)........Stock Code No
Unit of Measurement Bin No
Location in Store ...

Document Quantity
Date Initial
Reference Receipts Issues Balance
.
(Godown Store Ledger/Req.)


Annexure 12 - Store Value Ledger

STORE VALUE LEDGER
Name of Store:-..
Name of Article.. Stock Code No
Unit of Measurement..
[Ruppes]
GRN SMB/MRS Name of Supplier's or
Receipts Issues Balance
Reference Designation of
Date No. Requisitionist Qty. Rate. Value. Qty. Rate. Value. Qty. Rate. Value.

Annexure 13 - Material Requisition Slip (MRS)
MATERIAL REQUISITION SLIP (MRS)
Book No. Page No. Sign. Of Store Requsitionist

Request Date : Issue Date : Jr.Engineer
Department/Section Work Area/Unit # : Sectional In charges
Request Purpose/Activity ARE
Account Head : Warehouse/store : RE
Stock Description Requested

Stock Code M/unit Issued Qty. Unit rate Amount
Qty.
Recipients
Designation SSO ASO SSK/JSK System Operator
FM/AFM
Name
Signatures
Distribution:
Original copy for Accounts Section 2nd copy for store Section 3rd copy for concerned Section

Annexure 14 - Stock Measurement Book (Local Purchase)/ Valuation Sheet
STOCK MEASUREMENT BOOK (SMB)
Store.. (Use Separate Page for Each Delivery From Supplier and for Each Superscribed Cheque from Own Formation)
SM Book No. PAGE No. Date..
Source of Supply PO No.. PO Date..
Delivery Challan / Store Return Warrant / Intendent No.. Date..
ITEM DESCRIPTION QUANTITY Total

Amount of Freight and Amount Amount
Unit Rate Total Cost
Item No. Description Unit of No. in Article Other Charges of GST Incl.GS
Stock Code No No. in Words
Measurement Figures T
Total GST
G.Total
Particulars Delivered by Received by Inspected and Taken on Valuation Entered inby

Measured by Stock by Stock Card/
Done by Cheked by
Value Ledger
Ledger
Name
Designation
Signature
Particulars of Driver and Truck Through Which Meterial Was Received

CONTRACTORS
Name &
Vehicle / Truck Name of
Address of Signature & CNIC Signature
Registration No. Driver
Contractor

Annexure 15 - Material Indent for Other Formation Store
MATERIAL INDENT FOR OTHER FORMATION STORES
Book No...
From .. To...
Indent Serial No..... Date ....
Following Material may be Supplied to us.
Signature of
Price
Total Storekeeper
Item Quality Per
Item Value Issuing
Sr.No Descriptio Unit Unit
Code Stores
n Availabl
Indented Issued Rs. Rs.
e
Indent Store
Store Storekeep Material
Particul Approved Receivin
Issuing er Issuing Issued
ar and g
Officer Store on
Indented Officer/
Name in Block Letters
Letters
Designation
Superscribed Cheque
Book NoCheque NoDated..
Amount in Figures
Amount in Words
Note:- Separate Superscribed Cheque for each Material Indent Should be Issued.

Annexure - 16 Stock Measurement Book (Foreign Purchases) / Valuation Sheet
STOCK MEASUREMENT BOOK (Foreign Purchases)

Store(Useseparatepageforeachdeliveryfromsupplierandforeachsuperscribedchequefromownformation)
SM BOOK NO-------------- PAGENO. DATE.
Sourceofsupply PO# POdate
DiliveryChallan/StorereturnWarrant/intendent# DATE.
1)CostofdocumentsinPakRs Totalduties&othercharges(Tobeapportionedonmaterialcost)
2)Invoiceamountinforeigncurrency(Us$) SaleTax(NottoapportionedandtobeclaimedasGSTinput)
3)Currencyconversionfactor[2/1](Rs/$)
ITEMDESCRIPTION QUANTITY TotalCost

stock Unitof No UnitRate Currency UnitRate Costof Dutiesand
ItemNo CodeNo Description Measure in No.inWords (inforeigncurr) Conversion (inPakRs) Article OtherCharges
ment Figures $ Factor(Rs) Rupees Rupees Rupees
1 Nos
2
3
4
Total
SaleTax

Particulars Deliveredby Receivedby Inspectedand Takenon valuation Enteredinby

measuredby stockby Doneby Checkedby Stockcard/ Value
Ledger Ledger
Name
Designation
Signature
ParticularsofDriverandTruckthroughwhichmaterialwasreceived.
CONTRACTORS
Name&Address Signature&National Vehicle/Truck NameofDriver. Signature Truck/Vehicle
ofContractor. RegistrationCardNo: RegistrationCardNo. RegistrationNo.

Annexure 17 - Store Return Warrant
Name of WAPDA Formation

STORE RETURN WARRANT
S.R.W. BOOK NO.
PAGE NO.
DATE.
Name of Location /
Work / Generating Unit
Store Returning Department
Condition of Store
Account Head to be Cretidited
Signature of Sectional Head Approved By
TO BE FILLED BY STORE Referance TO BE FILLED BY

RETURNING SECTION Goods STORE SECTION System Operator
Sr. Description Previously RETURN Unit Total
No. I T E M C O D E of Store M.R.S # Date Unit Quantity Price Amount
NOTE:- (1) If the material is useable, apply the rate and stock code at which item is initially issued from store
crediting the Accounts Head previously debited. (Action to be taken by Material Returning Section)
(2) If the material is disposable apply rate and stock code determined by survey Committee
and credit be given to misc: Inc( Action to be taken by Accounts Section)
Particulars Store Returning Store Returning Store Receiving Store Receiving Valuation /
Officer Official Officer Store Keeper Coding By
Name:.
Designation
Signature
Original Copy for Account Section
2nd Copy for Store Section
3rd Copy for Sectional Head


Annexure 18 - Store Return Warrant Register
STORE RETURN WARRANT REGISTER
Sr. Description REFERENCE RETURN

No. ITEM CODE of Store M.R.S # Date Quantity Rate Amount
Particulars Store Returning Store Returning Store Receiving Store Receiving

Officer Official Officer Store Keeper
Name:.
Designation
Signature


Annexure 19 - Survey Report of Store

SURVEY REPORT OF STORES
Survey Report of Store Items, Which Have Become Unserviceale
Value of the Books Remarks by the officer incharge

Description of Date of Initial of Initial of
explaining the cause of the article Date
Articles Receipt Proposer Approver
becoming unserviceable
Quantity Rate Amount
No. Rs. Rs. Rs.
Indent Approved and Store Receiving Material

Particulars Store Issuing Officer Storekeeper Issuing Store
Indented by Officer/Official Issued on
No.Dated the20 No. Dated the ..20
Submitted to the Chief Engineer/Superintending Engineer, for Orders
.. ...
Divisional Officer Chief Engineer

Annexure 20 Stock Verification
STOCK VERIFICATION REPORT

Formation-------------------
Date of verification.______________
NAME OF STORE
NAME OF STORE KEEPER :
STOCK Unit Balance as on Store movement Stocks on physical count date

CODE NOMENCLATURE Nos/kg/ltr ---------- Store receipts Store issued Ac atually (Short)/ Excess Condition of stock
Last purchase
S.NO from ------- from -------- As per stock card counted/measur Qty Servicable/Damaged/
date
Qty to count date to count date ed,weighed Obsolete
1 2 3 4 5 6 7 8=(5+6-7) 9 10(8-9) 12 13
Signatures of
SSK Stock verifiers Supervisor/ Convener

Annexure 21 - Cash Book
CASH BOOK
Name of Bank . Month..

Documents Amount Received Amount Paid Intials
Date Accounts Head Particulars
Type No In Cash In Bank in Cash throu Bank Cashier B&AO DDO

Annexure 22 - Imprest Cash Book
IMPREST CASH BOOK

Name of Bank . Month..
Account Amount Nomenclatur Amount Signature
Date Vr.No J.V No. Cheque No.
Head Cash Bank e Cash Bank Cashier B&AO DDO

Annexure 23 - Chest Incoming/Outgoing Register
CHEST INCOMING/OUTGOING REGISTER
Incoming Out going Initial

Particulars Reference Date Quantity Value Date Quantity Value Cashier B&AO

Annexure 24 - Funds Demand Format Hydel power Dev Part-I

Part-I
(HYDEL POWER)
Demand No.
STATEMENT OF FUNDS FOR THE Month
NAME OF PROJECT
NAME OF BANK
BANK ACCOUNT NO.
(Rs. in
Million) LCC FCC TOTAL

1 PSDP Allocation (Approved)
2 Proportionate Budget up to month of demand
3 Total expenditure to the date of demand
4 Balance of Proportionate Budget (2-3)
5 Previous Demands outstanding (if any)
6 Current Demand
7 Total Demand (5+6)
8 Less Bank Balance of undisbursed demands
9 Net Demand (7-8)
Details of Current Demand
Account Head A/c Code
1 Land 010510
2 B&CW on Free hold Land - Offices 011010
3 Arms & Ammunition 012560
4 Misc. Equipment (Tents & Boats) 012585
5 Office Equipment 012610
6 Computer & Ancillary Equipment 012620
7 Furniture & Fixtures 012710
8 Transportation Equipment 012810
Oper. Building & Civil Works on Free Hold Land 08xx10

9
10 Power Generation Plant Assets 08xx20
11 Transmission & Transformation Equipments 08xx21
12 Dams & Reservoir Assets 08xx23
13 Tunnels, Weir, Head / Tail Race 08xx24
14 General / Plant Assets 08xx25
15 Other Buildings Residential / Non Residential 08xx30
16 Consultancy & Engineering 08xx35
17 Interest During Construction 08xx40
18 Custom duties, Taxes & Insurance 08xx45
19 Preliminary Expenses 08xx50
20 Project Management Expenses 08xx55
21 Project Supervisory Expenses 902500
Total Demand
Certified that the above expenditure on the project / schemes for which funds have been requisitioned carries the
approval of the Competent Authority and the provision for the same exists in the PC-I , II and also in PSDP for the
year________ and that the total Actual Expenditures are within budget after applying the cuts if any for the year.
Sr.B&AO/B&AO WAPDA CE/GM/PD WAPDA

Annexure 25 - Funds Demand Format Hydel power Dev Part-II

Part-II
PROFORMA FOR REQUIREMENT OF FUNDS FOR (PROJECT NAME) DEMAND FOR THE YEAR__________ CODE ___________
Demand No._______
(Fig. in Million)
Nature of payment and Name of Work
already
paid
amount
Token
drawn
No. & Up-date
Date of Total claimed Progres Whether
Date of Amount of
A/c passing Budget now sive interest Remarks /
Sr. No. Account Head bill Now paymen
Code by for the (against total bearing or Due date
present Demanded t
Audit year this (7+8) not
ed to remarks
demand
Audit
item of
expendit
ure)
1 2 3 4 5 6 7 8 9 10 11 12
Details of Current Demand
Capital Expenditure
1 010510Land
2 011010B&CW on Free hold Land - Offices
3 012560Arms & Ammunition
4 012585Misc. Equipments (Tents & Boats)
5 012610Office Equipment
6 012620Computer & Ancillary Equipment
7 012710Furniture & Fixtures
8 012810Transportation Equipment
Sub. Total (A)
Capital Work in Progress
Oper.Building & Civil Works on Free
08xx10
9 Hold Land
10 08xx20Power Generation Plant Assets
Transmission & Transformation
08xx21
11 Equipments
12 08xx23Dams & Reservoir Assets
13 08xx24Tunnels, Weir, Head / Tail Race
14 08xx25 General / Plant Assets
15 08xx30 Other Buildings Residential / Non Residential
16 08xx35 Consultancy & Engineering
17 08xx40 Interest During Construction
18 08xx45 Custom duties, Taxes & Insurance
19 08xx50 Preliminary Expenses
20 08xx55 Project Management Expenses
21 902500Project Supervisory Expenses
Sub. Total (B)
Grand Total (A+B)
Certificate:-
1 It is certified that the demand is based on approved / passed and Pre-audited bills according to Authority rules.
2 Certified that the funds demand against this requisition have not been demanded before and the payment against this demand
has not already been made.
3 Certified that funds being demanded against this demand would not be utilized for any other purpose.
Sr.B&AO/B&AO WAPDA CE/GM/PD WAPDA


Annexure 26 - Funds Demand Format Water Dev Part-I
PART-I
WATER WING WAPDA
( PSDP )
DEMAND OF FUNDS FOR THE MONTH OF ,
DEMAND NO.
(Water Development)
Rs. in Million
1. Name of Project (Code) ---------------------------------------------------------------

2. Banker & Account No. -------------------------------------------
3. PSDP / Budget Allocation Rs. ---------------------
4. Opening Balance as on Rs. ---------------------
5. Funds Released to date Rs. --------------------
6. Funds Utilized to date Rs. --------------------
7. Balance Available on Submission Date Rs.--------------------
8. Current Month Demand Rs. .. Less: Bank Balance R Net Demand Rs. -----------------
Description Year of
Final Funds Cash IPCs / Passed Expected Total
Released (6 + 7)
Upto date
1 2 3 4 5 6 7 8
1. Consultants
2. Land Compensation
3. Assets
4. Works:
5. Administrative Expenses:
Pay & Allowance
House Acquisition
Travelling Expenses
Transport Cost
Daily Staff Wages
Other Admn. Expenses
(Detail attached)
Non Releasable Provisions
Over Head Charges
Central Payments
Total:-
Note:- Certified that the expenditure for which the funds have been demanded as detailed above carries the approval of the
competent authority and provision exists under PSDP Allocation for the Current Financial Year as well as is covered under cost and
scope of work as reflected in approved PC-I / PC-II.
HEAD OF ACCOUNTS DEPTT: PROJECT DPROJECT DIRECTOR

Annexure 27 - Funds Demand Format Water Dev Part-II
PART-II
WATER WING WAPDA (Physical Progress)
DEMAND OF FUNDS FOR THE MONTH OF

DEMAND No.
Rs. in Million
Name of Project --------------------------------------Code

Approved PC-I Rs. ----------------
Revised PC-I / PC-II Rs.-----------------
Progressive Rs.-----------------
Progressive Physical ---------------%
(On June last)
Physical Progress Review / Plan
20xx-xx
Progressive Physical
Description of Work Achievement Achieve
Items Unit Scope as per PC-I / II on June-20xx Targets ment
Land Acres
Earth Work Mcft.
Concrete Lining Mcft.
Stone Pitching / Cft.
Stone Apron
Steel Works Cft.
Structure Nos.
Updated progress (%age) .%.
Certificate:- It is certified that the funds have been

utilized and approved Physical Scope of the
Project has been satisfactorily implemented.
HEAD OF ACCOUNTS DEPTT: PROJECT DIRECTOR

Annexure 28 - Funds Demand Format Water Dev Part-III
Part III
WATER WING WAPDA

ATTACHMENT TO DEMAND No.
FOR THE MONTH OF .. (Contracts)
Rs. in Million
Rs.in million Physical Quantities in Absolute Terms
Payment
made
upto Utilizatio Achieve Work
precedin Budget n ment done
Descripti g Allocatio updated Current upto Targets Progress against
on of Approved Financial n for during month Invoice/ precedin for 2013- during current
Contract value Year 2013-14 2013-14 demand I.P.C No. Physical Scope g year 14 2013-14 demand
1 2 3 4 5 6 7 8 9 10 11 12
Certificate:-
It is certified that value and scope of contracts are duly approved by the competent authority.
HEAD OF ACCOUNTS DEPTT: PROJECT DIRECTOR

Annexure - 29 Funds Demand Format Hydel Operations
Funds Demands Format Hydel Operations
The following imprest holder has requested for the transfer of additional funds: -
Demand Demand Budget Expen:

Name of Due Date Amount
Name of No. & received Allocation including
Sr. No Imprest of to be Remarks
Bank Dated & in this for the year this
Holder Payment released.
Code. office 20xx-xx demand
1 2 3 4 5 6 7 8 9 10
2
Total
Rupees: -
The Budget Grant for the year ----------- is available. TheGeneral Manager (Hydel) may kindly be
requested to approve and forward the demand to General Manager Finance (Power) for the approval of
release of funds to Manager Finance (Hydel)s Power, Wapda, Napier Road, Lahore, General Imprest
Account No..with .. through M.F (H.Q).

Annexure 30 - Bank Cheque Book Register

REGISTER OF BANK CHEQUE BOOKS
Receipts of Cheque Books Issue of Cheque Book Balance Initial

Who
Date Bank Name Bank A/c Quantity Serial No. Indent Quantity Serial No.
Received Date of Issue Issue to Code Quantity A/c Asstt: B&AO
(Leaf) From To Reference (Leaf) From To

Annexure 31 - Bank Reconciliation Statement
BANK RECONCILIATION STATEMENT

as on ..20
IMPREST CASH BOOK OFFICE OF THE ..
Name of Bank: Bank Account No
Balance as per Cash Book

Add: Unpresented/Uncleared cheques
Less: Uncredited/Uncollected cheques
Add: Profit on Bank Balance

Amounts directly paid into Bank
Others
Less: Bank Charges not taken

Collection Charges not received yet
Others
Balance as per Bank Statement
Cashier B&AO DDO


Annexure 32 - Retirement of Consignment
CRRK
PROVISIONAL ADJUSTMENT ACCOUNT OF THE CONSIGNMENT/SHIPMENT
Purchase Order No. dated

Consignee / Formation
CRRK Clearance File No.
Letter of Credit No. dated
Name of Supplier
Date of Arrival of Shipment at Sea Port / Airport
Date of Clearance of Shipment from Sea Port / Airport
Status of Shipment Full / Partial
No. of Shipment
Import Value in PKR as per bill of entry
Funds Received* (Rupees)

1 Demand No.________________ dated _________________
2 Demand No.________________ dated _________________
3 Demand No.________________ dated _________________
Total Funds (A)
Actual Payments to
Total
Disbursement payments made be made
1 2 3=1+2
L/C opening charges
90% L/C disbursement (or actual as per PO/LC)
Shipping Guarantee (To be recorded as advance)
Shipping Guarantee recovered
Custom duty
Sales tax (To be recorded as advance)
Income tax
Excise & Taxation
Stamp duty / fee
Civil Aviation (CAA) charges
Godown rent
Sea / Air fright
Delivery order (D/O) Charges
Shipping charges
Container Security (To be recorded as advance)
Advance container detention charges
Refund of container security
Port charges (Wharfage & Demurrage)
Additional demurrage charges
Recovery of demurrage (if any)
Transportation charges
Clearing agent service charges
Surveyor charges
Other Misc. expenses
Service charges of CRRK (@ 0.5% of import value)
10% balance L/C disbursement
Total Payments (B)
Net Balance Payable / (Receivable)** (A-B)
* Balance B/F in case of partial shipment

** Balance C/F in case of partial shipment
Note: This format is for guidance purpose. Amendments can be made as per situations whenever necessary at
the time of issuance of provisional adjustment accounts.

Annexure 33 - L.C Utilization Register
LC UTILIZATION REGISTER
Purchase Order No. Dated Formation/Cosignee

RRK No. LC File No.
Letter of Credit No. Dated Date & Place of Expiry
Expiry Extended up to
Expiry Extended up to
Amount in Foreign Currency Enhanced/Reduced by on making total
(FOB / C&F) Enhanced/Reduced by on making total
Enhanced/Reduced by on making total
Source of Financing Name of Beneficiary/Supplier
Shipment through WAPDA Shipping Agent or Beneficiary/Supplier
Particulars of
Amount Paid Balance Payment
S. No & Payments Rate of Clearance
Remarks
Date Bill/Invoce Foreign Pakistan Foreign Pakistan Exchage File No.
Date
No. Currency Currency Currency Currency
1 2 3 4 5 6 7 8 9 10

Annexure 34 - Debit Advice Register
DEBIT ADVICE REGISTER

DEBIT ADVICE ISSUED
Debit Advice Receiving

Sr. No. Description Unit/Office Amount CV No. Date Initial Remarks
No. Date
Code
DEBIT ADVICE RECEIVED
Debit Advice Issuing

Sr. No. Description Unit/Office Amount JV No. Date Initial Remarks
No. Date
Code

Annexure 35 - Credit Advice Register
CREDIT ADVICE REGISTER

CREDIT ADVICE ISSUED
Credit Advice Receiving

Sr. No. Description Unit/Office Amount Receipt No. Date Initial Remarks
No. Date
Code
CREDIT ADVICE RECEIVED
Credit Advice Issuing

Sr. No. Description Unit/Office Amount JV. No. Date Initial Remarks
No. Date
Code

Annexure - 36 - S.S Cheque Book Register
SUPERSCRIBED CHEQUE BOOKS REGISTER
Receipts of Cheque Books Issue to Cheque Books Balance Initial

Serial No. Indent To Whom Serial No.
Date Quantity Date Quantity Issue to Code Quantity A/c Asstt: B&AO
From To Reference Issued From To

Annexure 37 - S.S Cheques Issued/Receipt Register

REGISTER OF SUPERSCRIBED CHEQUES ISSUED/RECEIPT
Received/Issued During.20
Project by Whom Issued Project to Whom Issued

Sr.No Cheque No. Date Indent No. Indent Date
Name Code Amount Name Code Amount
Dealing Assistant B&AO Accounting Head
. .
Project/Office
Code No..


Annexure 38 - GST Returns Format
STATEMENT SHOWING DETAIL OF GST PAID & CLAIM FOR INPUT TAX
NAME OF FORMATION: ___________________________________
FOR THE MONTH OF_____________________________.
VALUE
GST GST Indent ST
SUPPLIER SUPPLIER SUPPLIER SUPPLIER SUPPLIER DOCUME PURCHAS EXCLUDI EXTRA
SR.NO INVOICE INVOICE HS CODE RATE QUANTITY UOM SALES TAX CREDIT With held
NAME GST # NTN TYPE PROVINCE NT TYPE E TYPE NG SALES TAX
NUMBER DATE NO as WH
TAX
1
2
3
4
5
6
TOTAL
Sr./Budget & Accounts Officer

Annexure 39 - Budget Control Report
BUDGET CONTROL REPORT
Name of the Formation .
Actual
Budget and Accounts Approved Budget for Proportionate Actual Expenditures
Expenditure for Balance Initial
Heads the year Budget Year to date
the month
Budget
Code Account Local Foreign Local Foreign Local Foreign Local Foreign Local Foreign A/c
B&AO
Head Asstt:
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.


Accounting Manual PDF

Enviado por

Dados do documento

Título original

Direitos autorais

Formatos disponíveis

Compartilhar este documento

Compartilhar ou incorporar documento

Opções de compartilhamento

Você considera este documento útil?

Este conteúdo é inapropriado?

Direitos autorais:

Formatos disponíveis

Accounting Manual PDF

Enviado por

Direitos autorais:

Formatos disponíveis

WATER AND POWER DEVELOPMENT

ACCOUNTING AND FINANCIAL REPORTING MANUAL

M. YOUSUF ADIL SALEEM & CO.

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 1

4.3.5 Going Concern .......................................................................................... 21

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 2

7.1.11.2 Recording of Fixed Assets in Register .................................................................... 43

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 3

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 4

12 TREASURY MANAGEMENT .................................................................................... 87

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 5

13.1 ACCOUNTS PAYABLES .................................................................................. 109

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 6

14.13 MAINTENANCE OF AUDIT REGISTER .................................................................. 136

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 7

19.9 ANNUAL CLOSING ....................................................................................... 155

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 8

ANNEXURE 19 - SURVEY REPORT OF STORE.................................................................. 194

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 9

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 10

Pakistan Water and Power Development Authority (WAPDA) is an autonomous

1.2 VISION STATEMENT AND VALUES

The Accounts and Finance function within WAPDA is characterized by:

The purpose of this manual is to establish self-acting standards, providing a clear

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 1

1.5 TERMS USED IN THE MANUAL

Accounting records The manual and computerized records of

Accounting Unit A primary unit of the Authority (Office,

Accounts payables The obligation to pay off a short term debt

Accounts receivable The money owed to WAPDA as a result of

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 2

Accounts Written Off Accounts receivables which in the opinion of

Acquisition Cost The invoice price of fixed assets including

Allowance for Doubtful Debts The estimate of the portion of gross

Asset Something valuable that an entity owns,

Authority WAPDA Authority comprising of a Chairman,

Bank Reconciliation Process of matching and comparing figures

Bank Reconciliation Statement Statement showing the comparison of cash

Bank Statement A copy issued by a bank to a customer

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 3

Budget A plan of financial operation embodying an

Capitalized Fixed Assets Capitalized fixed assets are those which

Cash Refers to money in the physical form of

Cash Advance Request Form A form specifically designed for acquiring

Cash Book-Imprest A book used in accounting units to record

Chart of Accounts It is a framework for the general ledger

Custodian of Cash An individual responsible for safeguarding

Demand Draft Demand draft (also called DD) is a written

Deposit (Paid) The sum that WAPDA shall pay in advance as

Deposit Slip A form specifically designed for the

Disbursement Request Form A form specifically designed for the

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 4

Disbursement Vouchers The vouchers used to request payments for

Dishonored Cheque A cheque which is returned unpaid by the

Drawing & Disbursing The person incharge of an office, project,

Expense Expense which is general in nature including

Fair Value The amount for which an asset could be

Finance Lease A lease that transfers substantially all the

Financial Statements Comprising of trial balance, profit and loss

Fiscal Year A twelve months period over which the

M. Yousuf Adil Saleem & Co., Chartered Accountants Page 5

Fittings The fitting are additions etc., which are

Fixed Asset Fixed Asset (also known as a non-current